Greenwich Council has warned that it is being asked to pay a “considerable amount of money” towards the Docklands Light Railway extension to Thamesmead – and that it may not be able to afford to stump up the cash.

The council’s deputy leader, Averil Lekau, revealed on Thursday that negotiations were taking place about paying for the project, which would allow 15,000 new homes to be built on old Ministry of Defence land in the town, a development called Thamesmead Waterfront.

Trains would also serve a new development to the north of the Thames, Beckton Riverside, with potentially another 15,000 new homes. Councillors in Newham heard last year that the project could cost up to £1.7 billion and could be finished by 2033.

Last year the Conservative government allocated £23 million to a rapid bus network linking Thamesmead and Woolwich, which is part of the project, but now both Greenwich and Newham councils are hoping the new Labour government will give the DLR route its backing as part of its drive to build more homes.

But Lekau told a transport scrutiny panel meeting on Thursday that money was proving a stumbling block.

She said: “We are being asked to front a considerable amount of money, including Newham, and both authorities are concerned that we will not be able to afford this. We’re still negotiating with the mayor and government to see how that goes.”

Thamesmead has been left off the rail network since the first homes were built by the mayor’s predecessors in the Greater London Council in 1968. Plans to run the Jubilee Line there were proposed in 1974 but scrapped five years later, leaving residents to take buses to Woolwich and Abbey Wood instead.

A DLR route to Thamesmead has been mooted ever since the original railway opened in 1987.

Woolwich Crossrail roundel
Greenwich paid towards Woolwich’s Crossrail station, but the benefits of that scheme were felt across a wider area. Image: The Greenwich Wire

Greenwich paid £15 million towards Woolwich’s Elizabeth Line station, using a combination of a “roof tax” on new homes in the area and using half of all the community infrastructure levy (CIL) paid by developers across the whole borough. It took 11 years to pay the money off – two years longer than planned – with Greenwich struggling to raise the cash from developers.

However, while the Elizabeth Line station has had a huge impact on the borough’s main town centre and a wide area beyond, the benefits of the DLR to Thamesmead would would be concentrated at the far eastern end.

Neighbouring Bexley has been agitating for the extension to run on to Belvedere, although London mayor Sadiq Khan has played down that possibility.

Greenwich faces a £27.3 million gap in next year’s budget, with the cabinet member for finance, Denise Hyland, warning at this week’s full council meeting that the government would need to add 7 per cent to its grants to the council to avoid it having to make more cuts.

On Wednesday, councillors also approved new CIL rates, which increase the charges paid in some parts of the borough – however, it is estimated that the council will only gain £5 million from the increase.