The UK Government said on Tuesday the proposed high-speed rail project to improve links between London and northern England will cost about £20 billion more than originally expected and is up to five years behind schedule.
The High Speed 2 project (HS2) aims to slash journey times between London and Birmingham.
A second phase of HS2 would provide a new link from Birmingham to Manchester and Leeds.
UK transport minister Grant Shapps told parliament the scheme would not be delivered at the original budget of £62.4 billion but would cost £81 billion-£88 billion.
The line was due to open in 2026 but the date has now been put back to 2028-2031 with the second phase launching between 2035 and 2040.
“I want to be clear with colleagues that there is no future for a project like this without being transparent and open, so we will be candid when challenges emerge,” Shapps said.
Labour transport spokesman Andy McDonald said: “This government has misled both parliament and the public about the cost of HS2.
“People need to have confidence in the project, so this delay is bad news for the UK transport system as a whole and the north of England in particular.”