Transport Secretary Patrick McLoughlin said he has "no doubt" the controversial High Speed 2 rail scheme will benefit the whole country, after claims it could cost some cities hundreds of millions of pounds.
Mr McLouglin said the project was "vital" for the economy's long-term health, adding: "It's of no doubt to me that it's beneficial to the UK. We need to make sure our cities in the north are able to compete with the rest of Europe as well."
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Ministers are prepared to battle to stop an extra £1.7bn payment demanded by Brussels, but it is far from certain that the UK will win.