TONY Blair will meet a delegation from Merseyside tonight as a final decision on Line One of Merseytram moves ever closer.

The group from Merseyside will include MPs Louise Ellman and George Howarth, whose constituencies lie at either end of Line One, as well as Liverpool council leader Mike Storey and his Knowsley counterpart Ron Round.

On Friday, Liverpool's executive board joined Knowsley in agreeing to support a joint £24m contingency fund for the tram if costs rise above the current budget of around £280m.

The key question now is whether that is enough for the Government who have asked for guarantees that all cost rises will be met locally, a "blank cheque" that neither district is prepared to write.

If the Government is not satisfied, it will not release the £170m it is contributing to the 11-mile route from Kings Dock to Kirkby and the project will collapse.

Initially it was believed the 5pm meeting would be with rail minister and Halton MP Derek Twigg and the fact that the Prime Minister is now personally involved could offer hope of a more positive outcome for the scheme.

A city source said: "There are two ways of looking at it. One is that if they were going to pull the plug then the PM might want to keep himself at arm's length from it, so the fact he is involved is a good sign.

"On the other hand he is fighting for control of his party at the moment and he needs all the backbench support he can get so it may be is merely trying to appease those Merseyside MPs who have asked for a meeting with him."

Last week the Government refused to finance a two-line tram scheme in Leeds which has been many years in the planning.