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The first tram from Edinburgh Airport to the heart of Scotland's capital could be running as early as 2014, thanks to a decision to rescue the project today.
Edinburgh's tram project was set back last week when the Scottish Government pulled the remaining £72 million funding because of a council decision to shorten the line to the edge of the city centre, in order to cut costs.
Minister's ruled that the heavily shortened line to Haymarket was not financially viable, forcing an emergency meeting of the city council today.
Councillors voted 28-15 to rescue the project by approving a £231 million loan to take the tram to St Andrew Square.
The decision authorises council chief executive Sue Bruce to enter a settlement agreement with contractor Bilfinger Berger on ``an unconditional basis as to funding''.
This means the council expects the additional funding needed, to take the line to St Andrew Square, to remain within the £231 million envelope. But costs could still rise further.
Ms Bruce said the extra money will be borrowed. She added: ``It could come from the Public Works Loan Board, for example, but that is a matter to take forward with our finance officer.''
City council leader Jenny Dawe said the agreement could see trams in the city centre by 2014.
She added: ``The best estimate I could give for trams running on the test track would be possibly early next year. I believe it may be into 2014 before we have a commercial service running but that is just purely a guesstimate without having the benefit of hearing the consortium's reaction today as to how they're going to take things forward.''
SNP council group leader Steve Cardownie said it was impossible to be sure that additional costs would not exceed £231 million, given the unreliable information about utility pipes running under the city, the risk of unexploded ordinance and important archaeological finds.
Officials estimate every week of delay adds another £300,000 to the total bill.
Mr Cardownie said: ``Nobody knows exactly what's under that ground until they dig it up and get under there. However, I am more confident in the officials that we have on the case. I think the new chief executive with the new director of corporate governance, who have been working with Bilfinger Berger for some time now, have established a new relationship.''
Conservative group leader Jeremy Balfour said he was disappointed with today's decision.
``We have written a blank cheque so that people can now go to St Andrew Square. But we don't know how much it's going to cost and we don't know when it's going to be delivered,'' he insisted.
Mr Balfour predicted that the chief executive would be back before the council in two years looking for more money to fulfil the contract.
Labour group leader Andrew Burns said: ``The utter chaos surrounding the political management of the trams was laid bare today. Figures are being plucked from the air. Nobody in charge seems to know what the actual facts are. And the council administration is being ordered what to do by a finance minister who clearly doesn't have confidence in his own SNP councillors.
``There are no winners today. It is another bleak day in a saga that lurches between chaos and farce.''
Meanwhile, bus workers stormed out of the meeting after claiming that the trams would need a£9 million annual subsidy from the city's buses.
Rab Fraser, chairman of the Lothian Buses branch of the Unite union, said: ``A tram to St Andrew Square would cost Lothian Buses over £9 million a year according to the figures today.''
Ms Dawe demanded to know where Mr Fraser got his figure from but he was unable to back up his claim. He said: ``If you can throw figures out, I'll throw figures out.''
The bus workers later left when it became clear that the St Andrew Square option would be going ahead, with one shouting: ``You've lost touch with reality.''