BLACKPOOL'S trams could be off the rails permanently within a decade.

That is the stark message from the resort's council after a £170m bid to bring the current Starr Gate to Fleetwood line up to modern light rail standards was snubbed.

Blackpool's is one of a number of schemes blocked by the Government after costs on light rail projects elsewhere in the country spiralled.

But town hall chiefs say the historic tram route is doomed without a major overhaul and are already looking at ways of putting in a less expensive bid.

Council leader, Cllr Roy Fisher, said: "Blackpool Council is hugely disappointed with this news. The Blackpool scheme represented excellent value for money but we seem to have suffered because other schemes were much higher than original cost estimates and therefore unreasonable assumptions have been made about what is essentially a replacement scheme.

"The council will not and cannot give up because without major investment, Blackpool may have no trams running in 10 years time."

Cllr Fisher says he is seeking urgent talks with the Government as preparations begin for a new bid.

A decision on the Blackpool scheme was taken on Tuesday night, just hours after transport secretary, Alaistair Darling, announced a new transport White Paper and the scrapping of tram schemes in Portsmouth and Leeds. An extension to Manchester's Metro has also been blocked.

A Department for Transport spokesman said: "We did carefully consider the proposal in terms of value for money, benefits to the local community and , but, unfortunately, Blackpool's case was not strong enough.

"The department totally understands the views about the importance of refurbishment to the regeneration on the town but there are a lot of calls on our money and we have to prioritise and make sure of the value of a project."

"The people who considered the proposal are well aware of the limitations of the current trams and are keen to consider what alternatives there are."

Opposition parties have slammed the council's leadership and called for urgent action to rescue the tram scheme.

Conservative leader, Cllr Peter Callow, said: "We have been told over and over again by senior councillors and officers that the light railway is vital to the masterplan.

"This is a desperate situation. We now need a complete rethink and a council meeting with the tram system as the only item on the agenda."

Liberal Democrat Cllr Stave Bate said: "Labour councillors have failed, Labour MP's have failed and the Labour Government has failed to deliver even this modest start to regeneration."