27 August 2011 Last updated at 19:07 ET

Edinburgh trams inquiry 'on hold for now'

The cost of the Edinburgh trams project has grown steadily after a series of delays

First Minister Alex Salmond will order a public inquiry into the beleaguered Edinburgh trams project once there is "greater clarity" about its direction, his spokesman has said.

Last week, councillors threw out a proposal to borrow an extra £231m to extend the line to St Andrew Square.

The line will now only go between Edinburgh Airport and Haymarket.

The move was described by the chief executive of Edinburgh's Chambers of Commerce, Graham Birse, as "bonkers".

The original budget for taking the line from Edinburgh airport to Newhaven was £545m.

But the cost of the tram project grew steadily, with estimates for partial completion to St Andrew Square reaching more than £830m after delays and a dispute between contractors Bilfinger Berger and tram company Tie.

On Thursday, councillors rejected official recommendations to take the controversial project from Edinburgh Airport to St Andrew Square in the centre of the city.

Instead, they backed a Labour amendment to take it only as far as Haymarket railway station in the west end.

The vote means the council will no longer need to borrow £231m to partially complete the project into the city centre.

The decision went against advice by council officials that a tram line from the airport to Haymarket could be loss-making.

'Tram fiasco'

Scottish Labour Lothians MSP Kezia Dugdale challenged Mr Salmond to "stop dragging his feet" and get the public inquiry under way.

She said: "It is time to rise above party politics, stop the blame game and get to the bottom of the tram fiasco.

"A full, independent public inquiry is the only way we can find out exactly how the tram project has been allowed to go so badly wrong."

"Alex Salmond needs to stop dragging his feet and get the inquiry up and running without delay."

Scottish Liberal Democrat leader Willie Rennie also called on Finance Secretary John Swinney to review the decision by Edinburgh City Council to opt for the truncated line.

The Scottish government has previously said it would "consider the implications" of the decision in light of a "fundamental change to the business case".

It has yet to supply the remaining £60m of its £500m investment in the trams.

Mr Rennie said: "The Scottish government will not want to fund this loss-making and low benefit-to-cost-ratio scheme.

"The Scottish government should intervene now before it's too late. Their action could help stop the Haymarket scheme and resurrect the profitable St Andrew Square option."

A spokesman for Mr Salmond responded: "We will be delighted to have a public inquiry into the trams fiasco, and will do so once there is greater clarity about the direction of the project so that its full circumstances can be examined."