The chairman of the High Speed 2 rail project has reportedly warned that its cost could rise by £30bn.
HS2 chairman Allan Cook has written to the Department for Transport to say the high-speed line cannot be delivered within its £56bn budget, according to the Financial Times.
The DfT said a review of HS2's costs is continuing.
The line will connect London, the Midlands and northern England using trains capable of travelling at 250mph.
"The chairman of HS2 Ltd is conducting detailed work into of the costs and schedule of the project to ensure it delivers benefits to passengers, the economy and represents value for money for the taxpayer," the DfT said in a statement.
"This work is ongoing. We expect Allan Cook to provide his final assessment in due course."
The first segment of the project between London and Birmingham is due to open at the end of 2026, with the second phase to Leeds and Manchester expected to be completed by 2032-33.
An HS2 spokesperson said: "We don't comment on leaks or speculation.
"We have previously noted that our chair, as you would expect, continues to scrutinise the programme, and regularly reports back to the Department [for Transport].
"We are determined to deliver a railway that rebalances the economy, creates jobs, boosts economic growth and is value for money for taxpayers."
Mr Cook was appointed to head HS2 in December 2018 after his predecessor, Sir Terry Morgan, resigned as chairman because of delays at the Crossrail project in London which he was also leading.
By Tom Burridge, BBC transport correspondent
There has been no denial that this letter was sent by the chairman of HS2 to the top civil servant at the Department for Transport.
And none of my contacts have rubbished the "potential £30bn overspend" idea outright.
Sources at HS2 and at the DfT insist Allan Cook's review is ongoing and that he has not settled on a final figure.
That may be true, but there has been a subtle shift of tone in recent months from both HS2 and the government; a creeping acceptance that the project, in its current form, is increasingly unlikely to come in within its £56bn budget.
And there has already been plenty of evidence suggesting that the project's original estimates of how much it would cost to purchase land and property along the route were significantly below the true values.
This leak, which feels at the very least like a case of 'no smoke without fire', comes at a very sensitive time.
Transport Secretary Chris Grayling, who has repeatedly insisted that the project HAS to be delivered within budget, is possibly leaving his post in a matter of days.
Boris Johnson - considered the front-runner to be the UK's next prime minister - is by no means a die-hard fan of the scheme.
And Mr Johnson has already nominated a former HS2 executive, Douglas Oakervee, to carry out a separate review of the project if he gets the keys to No 10 next week.
£56bn was already a hefty sum. As a former senior official at the Treasury puts it: "In terms of value for money it [HS2] scores lower than lots of other projects."
And the government "is taking quite a big risk" by putting so much money into high-speed rail, the source told me.
That risk looks set to rise.