Chris Bolt, the independent arbiter of the Tube Public-Private Partnership agreement, has told London Underground that contractor Tube Lines is not able to finance the full-extent of the planned upgrade.

The move piles pressure on London Mayor Boris Johnson to raise an extra £460m or set out where there will be cuts on the upgrade of the Piccadilly, Northern and Jubilee lines.

His decision marks a small victory for Tube Lines which has been at loggerheads with Underground bosses for months about the cost the modernisation.

Bolt last month said Tube Lines could charge £4.46bn for its services over the next seven and a half years.

But Bolt said on Tuesday that Tube Lines could “not finance the work London Underground wants done on the basis of what London Underground has said it can afford.”

The row over Tube funding is set to drag on over the summer. Bolt has given London Underground until May 21 to propose an alternative plan. Tube Lines must respond to London Underground’s revised terms by June 11.

Bolt will make a final decision on charging and financing by June 30.

Andrew Cleaves, acting chief executive of Tube Lines, welcomed the ultimatum. He said: “The arbiter has made a sensible decision today by calling on LU to cut its cloth according to its budget … or demonstrate once and for all that it can actually afford the work it has asked for.”