The mayor will impose a levy on business rates to raise funds

The scheme to create an east-west rail route across London is the biggest transport project in the UK since the construction of the Channel Tunnel.

In a written statement to MPs, Ms Kelly said London Mayor Ken Livingstone would contribute £7.7bn and hoped services would begin in 2017.

She said the Department for Transport would provide £5.6bn for the project.

This includes contributions from the City Corporation and airport operator BAA.

Royal Assent

Speaking about the contribution from Mr Livingstone, she said: "He (Mr Livingstone) indicated that he would like to do this from a combination of debt raised on the back of a new levy on national non-domestic rates in London, TfL prudential borrowing, developer contributions along the Crossrail route and other sources."

The company responsible for delivering the scheme, Cross London Rail links, will become a 100% owned Transport for London subsidiary, Ms Kelly added.

She said final arrangements would be in place by the time the Crossrail Bill receives Royal Assent.