The High Speed 2 rail project could be scaled back in northern England under cost-cutting plans drawn up by the panel reviewing the project, according to a report in the Financial Times.

The HS2 route beyond the East Midlands to Leeds and Sheffield could be axed and train speeds cut by 40mph in an attempt to save more than £10 billion, the report said, citing “people close to the panel” which is led by former HS2 chairman Douglas Oakervee.

The panel is also exploring whether to scrap a track development into Euston station in central London and instead ending the line at a proposed new hub in west London.

The panel is under pressure to find savings after HS2 Ltd admitted last month that projected costs had soared by more than £20 billion to £88 billion.

HS2 Ltd also pushed back the completion date from 2033 to between 2035 and 2040.

Current plans are for a Y-shaped line that runs from London to Birmingham in HS2’s first phase and then splits, with one leg going to Manchester via Crewe and the other to Leeds via Toton, a new East Midlands hub station between Nottingham and Derby.

There would also be a branch through Sheffield.

Judith Blake, leader of Leeds city council, told the Financial Times that failure to build the line to Leeds would “condemn the north and east of the UK to second-class status.”

“There will be grave long-term consequences for the economy of the north and east of the UK if the eastern leg of HS2 isn’t delivered in full,” she said.

“It would sacrifice the £600m of annual GDP growth forecast from better connections between Leeds and Birmingham alone, while also putting at risk the expected 50,000 additional jobs HS2 would create in the Leeds city region.”

The Department for Transport said: “We are not going to pre-empt or prejudice this work with a running commentary on the review’s progress.”