After months of speculation and official denials, the decision to scrap one of Scotland’s biggest transport infrastructure projects still caught most observers by surprise.

Among senior politicians and business leaders in the west of Scotland, there was a view that the £395m Glasgow Airport Rail Link was simply "too important" abandon in the run up to the 2014 Commonwealth Games. In the days leading up to the announcement, industry partners including Network Rail and train operator ScotRail still viewed it as a "live" project, with apparently positive developments in negotiations with airport owner BAA over reducing costs.

But after seeing the price of preparatory works at the airport balloon from an original estimate of £8m in 2007 to £70m -- a figure that was being publicly questioned by Labour last night -- ministers decided to take the political hit rather than risk committing to a potentially bottomless money pit.

Instead, Finance Secretary John Swinney committed to contributing to a "Fastlink" bus connection from Glasgow to the Scottish Exhibition and Conference Centre and newly expanded Southern General Hospital.

Initial costings by Strathclyde Partnership for Transport (SPT) put the bus link at up to £45m. The Herald also understands that Glasgow City Council and SPT have been examining options to extend Fastlink to the east end in time for the Games but that this is dependent on government funding.

However, it remained unclear yesterday what shape Fastlink would take, with fears expressed that it would simply be an enhanced bus service rather than a "tram on wheels".

As well as being hugely embarrassing for the Scottish Government, yesterday’s decision also puts Glasgow City Council in an awkward position as it had guaranteed both GARL and the Edinburgh Airport link, which was abandoned earlier amid similar concerns on potential cost overruns, as part of its bid to host the 2014 Games.

City council leader Steven Purcell said that scrapping the airport link was a "dagger in the heart of Glasgow" and accused the government of a "clear anti-Glasgow agenda".

He said: "The Glasgow Airport Rail Link is a vital piece of the infrastructure needed for the 2014 Commonwealth Games and the continued economic growth of the west of Scotland. The SNP has today taken that from us and offered us part funding for a bus lane. That is the worst deal in modern history."

Trade unions, business representatives including the CBI, SCDI and chambers of commerce joined environmentalists and sustainable transport lobbyists to condemn the decision.

Des McNulty, Labour’s Scottish transport spokesman, said: "By withdrawing first the Edinburgh and Glasgow airport links, the SNP has ensured that our transport system wont integrate rail and airport passengers. It will be a huge disappointment for people in Scotland not to be able to go by train to the country’s biggest airports, which is commonplace throughout Europe."

The criticism was echoed by the LibDems and Greens.

BAA also accused Transport Scotland (TS) of underestimating the costs of relocating infrastructure at the airport. A spokeswoman added: "We raised our concerns over the original cost estimates when the Glasgow Airport Rail Link was reviewed by the Scottish Parliament three years ago and recognise that Scottish Ministers have since faced significant increased costs from Transport Scotland’s revised forecasts."

However, it leaves a £182m programme of upgrades to the rail infrastructure at Paisley intact. The project, which is being carried out by Network Rail, was bundled together with GARL to avoid duplication in June 2008 when TS took responsibility for the project from SPT.

A spokesman for Network Rail said the package of improvements, including signalling work and junction enhancements, as well as the creation of two new platforms at Glasgow Central, was "on time and on budget".

So far, £47.5m has been spent on GARL, though TS was unable to specify how much of that had gone on the scrapped airport spur. Work has been undertaken to build 11 replacement football pitches and changing facilities at seven locations across Renfrewshire, while most of the land purchases necessary for the airport branch line had been agreed before TS took the project over.

Doubts over GARL emerged earlier this year when the Sunday Herald revealed the cost of relocating a fuel farm at Glasgow Airport had risen from £5m to £30m. The Herald has since learned that BAA had lined up a preferred bidder in June to carry out the work but the deal was put on hold while a review of the project’s costs and scope was carried out.