The project was halted as part of Prime Minister Rishi Sunak’s £6.5bn cost-cutting plan announced last October.

This involved axing phase 2 to Manchester and finding a private investor to pay for the final 5.4-mile TBM drive to the station and the redevelopment of Euston site through over-station development.

According to Whitehall sources, the Government has decided now to pay the upfront tunnelling cost of around £1bn to avoid further costly delays on the project.

The Government then hopes to recoup the cost through the wider development of the Euston station site once the planned development corporation secures investment from the private sector to develop the area.

Official go-ahead for the drive is now expected in weeks.

Over the last few months Skanska Costain Strabag JV has continued with preparation works to launch the two final TBMs from the Old Oak Common Box towards Euston, despite uncertainty about the Euston terminus plan, meaning the project is unlikely to be delayed due to the review of costs.

Three months ago the public accounts committee warned the Government that it had to stop dithering over how to privately fund the Hs2 London terminus and final TBM drive concluding that costs could only soar further.

Sir John Armitt, chair of the National Infrastructure Commission, had also warned last November that the Government would never get the private sector to pay for the final tunnel dig.