Cheshire East is to continue negotiating with government for compensation after the scrapping of HS2, amid officer fears the cancellation of the northern leg could plunge the council into financial crisis.

As has been previously reported, Cheshire East had already invested £11m in preparations for HS2 coming to Crewe and there are fears just over £8m of that will have to be written off at a time the council has just £14m in reserves.

Council leader Sam Corcoran (Lab) and deputy Craig Browne (Ind) met with rail minister Huw Merriman last month and said talks between the council and government are to continue.

This week there was cross-party support at full council for officers to negotiate with central government for an appropriate compensation and alternative investment package for transport improvements.

Cllr Browne told the meeting: "I've rarely seen a single decision by government do more to unite feelings across the council chamber than this one.

"It's not just a mistake, it's a missed once-in-a-generation opportunity to genuinely deliver a levelling-up in the north of England and free up capacity on our crumbling rail network."

Conservative group leader Janet Clowes said this was very much a cross-party, Cheshire East remonstration with government.

"We have a really good case to bring forward and we have a right to expect more in terms of the response that we get as to how those monies are now going to be allocated, because Crewe deserves it as does the rest of Cheshire East that was set to benefit, indirectly, from Crewe being the gateway to the north," said Cllr Clowes.

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Crewe councillor Connor Naismith (Lab) said: "Rishi Sunak went to Conservative Party conference on a promise to stop the boats but, having spectacularly failed to do that, he decided to stop the trains instead."

He added: "The consequences for Crewe and Nantwich and for Cheshire East and the wider region are dire."

Cheshire East mayor Rod Fletcher, who spent his working life on the railways, described the decision to scrap HS2 as 'devastating'.

He said capacity not speed was the driving factor behind HS2 and the rail lines would now still be working at over-capacity.

In speaking on the recommendations, Cllr Fletcher acknowledged he was breaking with the mayoral tradition of always abstaining.

A report to this week's council meeting from head of finance Alex Thompson warned if the council has to fund the £8.6m already spent on the scheme from its revenue account this 'could therefore trigger a S114 notice, as the council could be placed in a position where there are insufficient funds, and inadequate reserves, to manage in-year expenditure'.

When asked after the meeting about the likelihood of the council going bankrupt because of HS2, Cllr Corcoran told the Local Democracy Reporting Service: "The council's available reserves make the council vulnerable to external shocks and we had a massive shock when HS2 was cancelled.

"I have seen criticism of the council for investing so much on HS2 coming to Crewe – we live in a strange world where you cannot rely on a government to stand by legislation that it passed just two years ago."

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He added: "I hope that the government will come forward soon with a definite compensation and alternative investment package."

Cllr Browne told the LDRS: "Obviously part of the negotiation with government is to try and help them understand how serious this is for us, but saying we're going to go bust is a significant over-statement at this stage."