EDINBURGH'S over-budget tram project is expected to cost nearly four times as much per mile of track than similar light rail projects elsewhere in the UK, a Government report has confirmed.

Figures published by the Department for Transport put the average cost of building tramways in urban conurbations at £25 million per mile, though this does not include Edinburgh, where costs have rocketed by £231m and the route has been curtailed due to a funding shortfall.

The report came as the true extent of traffic congestion in Edinburgh caused by tram repairs to Princes Street was seen for the first time.

The latest figures suggest that, at £776m, the predicted cost of building an eight-mile route connecting the airport to St Andrew Square in the city centre will be nearly £100m per mile.

But, in a sign that Edinburgh’s experience has not damped enthusiasm in Whitehall for light rail, the DfT report found it could be used in other major cities if cheaper delivery options could be found.

It has identified a number of factors which were said to have driven up light rail costs in the UK and made the option unattractive to councils, with diversion of underground utility pipes and cables emerging as the most significant factor.

The costs of constructing tram routes in Manchester, London, Nottingham, Birmingham and Sheffield varied significantly according to whether they were on off-street sections using disused railway routes or in city centre streets where major utility diversions are necessary.

Problems with utility diversions have played a major role in pushing up the cost of Edinburgh’s tram scheme, not least because of the knock-on disruptive effect they have had on the main track-laying programme.

But, at £47m per mile, the original 11.5-mile route from the airport to Newhaven Harbour on the banks of the Firth, costing £545m in total, would still have been the UK’s second most expensive tram project to date.

The only project to have exceeded that price tag was a five-mile extension to the Docklands Light Railway in 1994, which cost £77m per mile.

In an upbeat assessment of light rail’s potential for the UK, Norman Baker, the Liberal Democrat minister for transport, said: “Light rail is good for passengers, good for local economics, good for the local environment and it’s a mode of public transport that passengers really enjoy using -- that is why I’m committed to doing everything we can to bring costs down to make it a viable option.

“In the past light rail systems have been seen as expensive and an unaffordable option for local authorities -- I initiated this review so we can get to the nub of the problem.”

Transform Scotland welcomed the DfT’s report and expressed hope its findings could lead to swifter progress in the Edinburgh project.

Spokesman Paul Tetlaw said: “Despite what people may have been led to believe following the impasse over completion of the Edinburgh tram scheme, trams are indeed good for passengers, good for local economics and good for the local environment.

“Perhaps we can now start to catch up other countries around the world who have been investing heavily in this transport mode over recent years.”

The report was published as dozens of buses competed side-by-side for space on Edinburgh’s George Street as traffic diversions introduced to allow tram repairs on neighbouring Princes Street swung into full effect.

Though the busy thoroughfare has been closed off since the weekend, the local bank holiday on Monday meant that yesterday was the first chance to see how well the contingency traffic plans would work.

Princes Street is due to be closed for up to 10 months as contractors dig up tracks that were first laid in 2009 but have since seen cracks appear in the road surface, though a break is planned over the festive period.

Despite the congested scenes, traders reported traffic flowing on George Street yesterday though motorists were said to be experiencing longer delays than normal in the city centre.