Tyne Bridge MP David Clelland, who sits on the House of Commons transport select committee, said it was important to realise that, whoever was awarded the contract, the end result would be a more efficient Metro system. He said: "The whole question here is what can we do to make sure the money put into Metro gives us even greater results. I would expect that within the 20 years we are looking at we will more than make up that amount.

"Whatever happens we will have a rail infrastructure owned by the public, but possibly with someone else operating the trains.

"It is not being privatised. I personally would like to see the in-house bid win, and I don’t see any reason why they should not."

Nexus has insisted there is independent scrutiny in place to ensure no vested interest could apply.

A spokesman said: "The funding for an in-house bid has been planned by Nexus over the last three years. Metro’s budgets are ring- fenced so this in no way impacts on its day-to-day finances. We believe an in-house team should have the opportunity to put in a bid alongside external parties, and a level of funding is required for it do this competitively.

"This funding represents far less than 1% of the total inward investment we are seeking to secure, and is part and parcel of the time, effort and money we have put into the whole process."