Britain's government said on Thursday that it is "optimistic" a deal to rescue London's public transport operator can be found, hours after the city's mayor warned that a government grant was needed before the end of the day.
According to London mayor Sadiq Khan, Transport for London (TfL) has lost 90% of its fare revenues over the last two months because of confinement measures imposed to contain the spread of the COVID-19 pandemic.
"We're the only transport system in Western Europe that gets no government grant. We're paid for ostensibly by the fares we bring in, the congestion charge and by advertising," Khan, from the main opposition labour party, told LBC Radio on Thursday morning.
"We've been involved in weeks and weeks of negotiations with the government and it is really hard to get support from them.
"Unless the government today gives us confirmation of the grant that we need, the consequences could be quite severe and the implications for all of us will be huge," he said, warning that services may be reduced unless the government steps in.
"The only way to balance the books is to cut services," he stressed.
Transport Secretary Grant Shapps, who delivered the government's daily COVID-19 update from Downing Street, said that he is "optimistic" a rescue deal can be reached.
He said however that "we don't know what the long-term will be".
"But in the short term trains and buses will continue to run".
According to Khan, TfL had reserves of £2.1 billion before the health crisis began but spent £600 million a month to keep the network of underground trains and buses running at a reduced service during the lockdown.
"We're required by law to keep two months' worth of money in reserve to pay for services," Khan had explained.
TfL announced on April 24 that is had put 7,000 of its staff on furlough and that since confinement measures were first introduced int he country on March 23, Tube and bus journeys had fallen by 95% and 85% respectively.