Specialist transport union RMT said that one of four approved bidders for the privatisation of Tyne and Wear Metro – MTR Rail from Hong Kong – have pulled out of the process leaving just the in-house operation and two private companies still in the frame.

RMT also say that around £1m of tax payers money has been spent on an in-house tender for a privatisation that the overwhelming majority of people are opposed to, money that could have been invested in improvements to Tyne and Wear Metro

Newcastle MP Jim Cousins has tabled a motion in the House of Commons saying that: "the tendering process can play no useful purpose and that the best interests of passengers will be served by the Metro remaining as a unified railway in the public sector, where every penny of funds invested is spent on improving passenger services."

Working with MPs and the campaign Keep Metro Public, RMT have warned that privatisation would mean job cuts and the milking of the contract by a private company to pump up returns for their shareholders.

General secretary Bob Crow said: "The withdrawal of MTR Rail shows just how shaky this whole privatisation plan really is.

"It's pressure from the campaign which has sent out a signal to the private sector that Tyne and Wear Metro is not going to be sold off for a fast buck and that they will have a fight on their hands every step of the way.

"The Nexus passenger transport executive and the Government should pull this privatisation plan before more money is wasted and before irreparable damage is done to Britain's most successful railway in the name of greed and profit."

The contract is due to be awarded in November.

Nexus declined to make a comment during the procurement process.