Prime Minister John Key has confirmed the Government will back the building of an Auckland rail link, but is proposing it start in 2020 - later than Auckland Council's target.
Auckland Mayor Len Brown's pet project, the $2.86 billion city rail link forming a loop was signed off by the Auckland Council in May last year.
The project as planned would require central government to put in funding, however Key today would not say how much the Government would contribute.
He said he would spell out more details in a speech on Friday, which would cover other transport issues as well as the rail loop.
It was not realistic for Auckland to pay for it all itself, or for the Government's share to to come from the land transport fund.
It would have to come from a separate appropriation of funds.
"It will have to be paid for by a combination of sources - it won't just be taxpayer funds. Auckland will also have to find ways of paying for its contribution."
The time frame starting in 2020 reflected more accurately the likely demand for the use of the rail.
Asked if it was a u-turn by the Government, Key said it had never ruled out the rail loop, but had concerns about its patronage.
"It's always been a question of when not if."
But it would still be "a stretch" in terms of its business case and having the numbers stack up.
The Government was looking at future-proofing Auckland's transport needs.
The loop was part of an overall package including a mix of other projects. It comes on top of $1.6b of spending already on rail in Auckland.
The Government had rejected a business case for the project in 2010, and last year asked for a revised business case to be put forward at a cost of $1.7m.
"I am delighted the Government has agreed to support this project," Brown said.
"The Government has now given us a huge challenge to respond to. Along with the electrification of rail, the link will be the biggest advance in Auckland transport since the Harbour Bridge."
Brown said it would be his "number-one priority as mayor".
In April, the Green Party launched a campaign for the rail link, accusing the Government of standing in the way of Auckland's progress.
"The business case for the rail link is overwhelming. It will create jobs, increase productivity and free up the motorways. It is a much better spend than the Government's proposed motorway expenditure," party transport spokeswoman Julie Anne Genter said.
The proposed Auckland City Rail Link would extend the existing rail line underground through Britomart, under Albert, Vincent and Pitt streets, then beneath Karangahape Road and the Central Motorway Junction to Symonds Street before emerging above ground to join the western line near Eden Terrace.
It would be built in two 3.5 kilometre long twin tunnels up to 45 metres below the city.
Auckland councillor Christine Fletcher said she had been "encouraged greatly" by the Government's responsiveness.
She said despite the "noise from the left" saying the Government did not support public transport, there had been consistent support for the council in buying property and doing the legal work required to secure the route for the rail link.
"They would not being doing that unless they were committed to this project."
Fletcher said the question was more around whether the council could get the funding and if the business plan was robust.
She would not attend the meeting on Friday, despite being the deputy chair of the transport committee, but was convinced it would mean good news.
Auckland Transport spokesman Mark Hannan said the agency had not been informed of any decision on the loop.
Hannan said Labour MP Phil Twyford was planning to ask some questions about the link this afternoon in Parliament, and that John Key was due to visit Auckland on Friday, but that was all he had heard.
Is it time for Judith Collins to go?Related story: Judith Collins looking isolated