Transport for London has secured a bailout to continue operating services until the end of March 2021.
The exact amount of money involved is subject to passenger revenue in the coming months but is set to be around £1.8 billion.
TfL said: ‘Discussions on longer-term sustainable funding continue.’
Amendments to the Congestion Charge introduced in June as part of a previous bailout – a 30% increase in the fee and longer operating hours – will remain in place due to the new deal.
London Mayor Sadiq Khan said last month that the Government wanted TfL to extend the charging zone to the North and South Circular roads, covering around four million more Londoners.
Other proposed measures described by Mr Khan as ‘ill-advised and draconian’ included above-inflation public transport fare rises.
Responding to the new agreement, Mr Khan said the negotiations have been ‘an appalling and totally unnecessary distraction at a time when every ounce of attention should have been focused on trying to slow the spread of Covid-19 and protecting jobs’.
He went on: ‘I am pleased that we have succeeded in killing off the very worst Government proposals.
‘These proposals from the Government would have hammered Londoners by massively expanding the Congestion Charge zone, scrapping free travel for older and younger Londoners and increasing TfL fares by more than RPI 1.
‘I am determined that none of this will now happen.
‘This is not a perfect deal, but we fought hard to get to the best possible place.
‘The only reason TfL needs Government support is because almost all our fares income has dried up since March as Londoners have done the right thing.’
London transport commissioner Andy Byford said: ‘Reaching this agreement with the Government allows us to help London through this next phase of the pandemic.
‘We will continue to work with the Mayor and the Government on our longer-term funding needs.
‘As always, our staff are working tirelessly to serve London’s people and businesses, supporting the city’s economy and providing an excellent, safe and reliable service to our customers every day.’
TfL said it would receive a ‘core amount of £1 billion’, consisting of a £905 million grant and £95 million of borrowing.
Last month Boris Johnson claimed TfL was ‘effectively bankrupted’ before coronavirus, and proposals to hike charges were ‘entirely the responsibility’ of Mr Khan.
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