The embattled highspeed rail project, HS2, will not reach its London terminus without private sector funding, Sky News understands.

Without substantial corporate investment there is no guarantee of the line ending in Euston – instead it would end at Old Oak Common in west London.

Prime Minister Rishi Sunak has reallocated the public sector budget for a new extension to the station and a tunnel leading to it on transport links in other parts of the country.

In a speech scrapping the Manchester leg of the line, Sunak pledged investment for other areas of the North, including a Midlands Rail Hub to connect 50 stations and the Network North project to join up northern cities by rail.

Euston and its surrounds are already in the process of being redeveloped to make way for the line and for a new Euston station.

But HS2 work at Euston was paused earlier this year due to ballooning costs. Estimates grew to £4.8bn compared with an initial, 2019 projected spend of £2.6bn.

A new development company, separate from HS2 Ltd, will be appointed to manage the delivery of the Euston project, the Department for Transport said.

“There is already support and interest from the private sector,” a government spokesperson said.

“Ministers have had discussions with key partners since the announcement and the transport secretary will be meeting with the Euston Partnership in the coming weeks.”

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Extending HS2 to Euston involves building 4.5 miles of underground tunnel from Old Oak Common and a six-platform station next to the existing Euston station. Initial plans were to build 11 platforms.

The government has again showed its support for the original plans.

Mr Sunak said the line from Birmingham to Euston will be completed, in his Conservative Party conference speech on Wednesday, and the government’s new plan for the central London station, including taking private investment, will generate “£6.5bn of savings”.

Officials at the Department for Transport believe the capacity of Old Oak Common as an HS2 start and end point can facilitate eight trains per hour, the same number as planned for Euston.

There are concerns, however, at the lack of options for onward journeys from Old Oak Common. Euston is connected to national rail and multiple tube lines.

Government modelling also showed two-thirds of people would prefer to travel to or from Euston.