The long-awaited Northern Powerhouse Rail project could begin early with an extension of the existing plans for HS2 from Manchester to Liverpool.

The Chancellor of the Exchequer and the Transport Secretary are said to be considering the extension of HS2 from Manchester to Liverpool to co-ordinate with the opening of the HS2 link in 2032, the Yorkshire Post reports.

There had been hopes of an announcement in this month's budget, but a decision will now wait for a business case from Transport for the North.

However, the encouraging suggestion of progress on an east-west Transpennine rail link comes as fresh doubts are cast on confidence that HS2 will ever reach north of Birmingham. The Yorkshire spur is thought to be at particular risk.

Two Cabinet ministers have suggested the £56B project should be cancelled entirely, whilst a third said the Birmingham to Leeds leg should be scrapped, the Sunday Telegraph reported. Behind their concerns are fears that costs will escalate to £100B.

Speaking at a rail industry event, Transport Secretary Chris Grayling appeared to endorse the risks to the Birmingham-Leeds line.

“It will be a fantastic railway, one of the best in Europe but it still needs support if it is to definitely go to Leeds and connect to the Northern Powerhouse Rail," New Civil Engineer reported him saying.

Grayling went on to say the Birmingham-Leeds line was "not in the bag."

HS2 Chairman Sir Terry Morgan told the Railway Industry Association annual conference last week that without the Northern Spur, the HS2 project was in serious peril.

“The truth is, that without the northern section of HS2 there isn’t a business case for the line at all. You wouldn’t do HS2 on the basis of phase one [London to Birmingham] on its own. HS2 definitely needs phase two, otherwise it does not work,” New Civil Engineer reported him saying.

The Department of Transport responded to reports of the conference by saying any threat to the HS2 line to Birmingham was "absolute nonsense" and that Grayling's and Morgan's comments were taken out of the context of appeals to local business leaders to campaign for the HS2 lines in the way that London business campaigned for Crossrail.