AN influential group of MPs will investigate overhauling the way major transport projects are funded following the failure of Hampshire's multi-millionpound tram scheme.
The Commons Transport Select Committee will study proposals to boost local councils' powers to allow them to raise their own cash to fund major transport schemes.
In 2004 the government pulled the funding for a light rail link between Fareham, Gosport and Portsmouth after costs rose from £100m to £270m.
The south Hampshire scheme, aimed at removing three million cars a year from the congested M27 and A32, was 14 years in the planning and had already cost taxpayers £10m.
A previous report by the transport committee, published last year, condemned the Department for Transport for "failing to give a strategic lead in the development of light rail" and questioned its commitment to trams.
Instead of taking a lead, the department had refused to trust local authorities' estimates of their own requirements and been inconsistent in funding decisions, MPs said.
The new inquiry will look at how funding arrangements could be changed to prevent the same thing happening again.
Chris Huhne, Liberal Democrat MP for Eastleigh, said reform of spending rules could not come soon enough.
He said: "Local authorities should have far more latitude to raise money for local projects. The top-down need to get everything approved and signed-off in Whitehall is crazy."
The committee has yet to decide who it wants to question at its hearings, but it is possible leading players in Hampshire's light rail project could be asked to face a grilling by MPs.
The inquiry will be completed by July and a report published in the autumn.
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