Mr Khan’s letter highlights a number of concerns. It states: “As you will know, funding for local authority-led major schemes is agreed through the Regional Funding Allocation process.

“Last year, we asked regions to refresh their original advice and the indicative funding envelopes were extended three years to 2018/19. This was received in February and the Government responded in July. The North West did not allocate funding to the Merseytram scheme.

“As I and other ministerial colleagues have said before, the Department would be happy to receive a fresh proposal for Merseytram, but only as long as it has been prioritised for funding by the region. The opportunity to do this was not taken up by the region.”

Merseytram collapsed in 2005 when the Government refused its £170m funding contribution for Line One at the last minute, claiming the costs had spiralled.

But Merseytravel has never given up hope that the project could go ahead, and it has remained the top priority in the Local Transport plan.

Cllr Bradley said: “It’s sad that we are in this position, lots of people have worked really hard to try and resurrect Merseytram.”

Asked if Merseyside should now give up on trams, he said: “I don’t think we have got any option at the moment, it’s quite clear what he is saying.”