RAIL unions warned of a bitter and protracted industrial dispute as they blasted the latest London Underground funding deal today.

The agreement between Transport Secretary Grant Shapps and Transport for London (TfL) to help keep Tube trains running during the Covid-19 pandemic is worth over £1 billion and runs until December 11.

As part of the deal — the third such government bailout during the crisis — TfL will have to make an extra £900 million of savings this year on top of cost-cutting measures already being implemented. 

TfL, which operates London’s public transport on behalf of the capital’s mayor, must also find an extra £500m to £1bn of income per year from 2023.

The Department for Transport (DfT) said that Mayor Sadiq Khan, re-elected for a second term last month, has committed to review TfL’s “generous” pensions scheme and “make progress” towards running driverless trains on Tube services in future.

Mr Khan has disputed the latter point, saying he had made it “crystal clear” that he would resist the introduction of driverless trains — but he did concede it was “not the deal we wanted.”

Reacting to the announcement, Finn Brennan of train driver’s union Aslef said: “In deciding to pick a fight with workers, the government have made a serious mistake.

“The consequences will be protracted bitter industrial disputes at a time when the focus should have been on rebuilding confidence in using public transport.”

TSSA general secretary Manuel Cortes warned that the “future is bleak” for the capital’s transport system.

“Londoners are being punished again for having the audacity not to vote for a Tory mayor,” he said.

“The pandemic had the same devastating impact on the finances of TfL as on privatised rail companies. Yet TfL have had to beg for scraps of funding while the private rail companies have been bailed out with no strings attached.

“It’s one rule for the fat-cat shareholders and another for publicly owned TfL.”

RMT general secretary Mick Lynch slammed the deal as a “disgraceful stitch-up” that workers will resist.

He said: “With funding only lasting until December, London is being held to ransom with a gun to its head rather than being given the long-term stable funding [it needs].”

London’s transport commissioner Andy Byford said: “We will [make savings] while protecting front-line services to deliver what London needs and to play our part in recovery, decarbonisation and the promotion of active travel.”