Lisa Nandy indicates Louise Haigh considering plan for high-speed route to terminate in central London

A worker walks past the HS2 construction site at Euston station in London. Photograph: Vuk Valcic/Zuma Press Wire/Shutterstock

The transport secretary is considering extending the HS2 line to Euston, her cabinet colleague Lisa Nandy has indicated, after Louise Haigh claimed it would make “absolutely no sense” to have the high-speed route terminate outside central London.

Haigh also hinted at a cut-price “HS2-lite”, which would involve constructing a new section between Birmingham and Crewe that allows trains to travel faster than on the west coast mainline – but slower than HS2.

Rishi Sunak last year ruled out extending the HS2 line to central London unless enough private investment was secured for the project, hoping to save £6.5bn of taxpayers’ money. It would instead go to Old Oak Common in west London.

However the Commons public accounts committee in February said it was “highly sceptical” the transport department would be able to attract enough private investment on “the scale and speed required” to make extending HS2 to Euston a success.

When asked if it was affordable for HS2 to reach Eus ton, Haigh said on Tuesday: “We will be making an announcement on that soon.

“But it certainly would never have made sense to leave it between Old Oak Common and Birmingham.”

If HS2 terminated at Old Oak Common, passengers who want to travel to central London would need to change trains.

The project is expected to be funded by changes that the chancellor, Rachel Reeves, will announce in her budget on 30 October.

When asked if the line would go ahead, Nandy, the culture secretary, told Times Radio: “I think the difficulty that the transport secretary and the chancellor have is that the last government seriously overcommitted to projects that they had no idea how they were going to fund from the public finances, and so it’s meant some very tough decisions.

“I can’t obviously pre-empt what’s going to be in the spending review, which the chancellor will announce in a matter of weeks.

“But I know it’s something that the transport secretary is looking at very seriously.”

Nandy also suggested east-west connectivity may be a higher priority, in light of plans for a new high-speed rail line linking Birmingham and Manchester.

The mayors of Greater Manchester and the West Midlands have unveiled a 50-mile track to run from where the HS2 line is due to end in Staffordshire so it can join a planned “northern powerhouse” rail line west of Manchester airport.

Nandy said: “I would say that the biggest, pressing, priority in the north of England is to improve east-west connectivity.

“One of the reasons that people suffer absolute misery on the railways in the north is because everything gets snarled up around Manchester because the stations are very old, the platforms aren’t long enough, we simply don’t have the capacity and it causes absolute chaos from east to west.”

An infrastructure review by the former Siemens UK boss Jürgen Maier for Labour last month said the cancellation of the HS2 northern leg would “leave the west coast mainline, and in tandem the M6 [motorway], to collapse”.

It comes after a transport watchdog said passengers using Euston station were being put in danger by high levels of overcrowding.

London TravelWatch warned that “last-minute announcements” meant passengers “rush to platforms”, and staff “appear overwhelmed by the sheer numbers of people”.

The Office of Rail and Road issued an improvement notice to Network Rail in relation to the station, accusing the government-owned company of failing to prevent safety risks from “unacceptable” overcrowding.