THE £451m scheme to rebuild the Royal Liverpool Hospital should be put on hold amid fresh evidence that the use of private cash will impose crippling costs, MPs say today.

Claims that the private finance initiative (PFI) offers better value for money for infrastructure projects than upfront government funds are rigged, the Treasury Select Committee suggests.

Its damning report warns of an "assessment bias" that wrongly backs PFI – highlighting the example of the desperately-needed new city centre hospital, given the go-ahead last year.And it concludes: "We ask the government to give further consideration before proceeding with the procurement, in its present form, of the Royal Liverpool and Broadgreen Hospital."

Any such delay would be greeted with alarm and dismay in Liverpool, because the current, ageing 1970s-built hospital has been described as "like a little bit of Eastern Europe".

Furthermore, government funds for capital investment have been slashed – leading most school and health chiefs to conclude that PFI is "the only game in town" for new projects.

Indeed, on the very day that the Royal Liverpool was given the green light, the government axed a planned £464m new hospital in the North-East because it wasn't a PFI scheme.

But, Andrew Tyrie, the committee's Conservative chairman said it was time to change course, saying: "We can't carry on as we are, expecting the next generation of taxpayers to pick up the tab.

"PFI should only be used where we can show clear benefits for the taxpayer. This will be tough in the short term, but it should benefit the economy and public finances in the longer term."