The Financial Times has seen the crucial government-commissioned report by former HS2 chairman Doug Oakervee which is due to be officially published shortly.
It warns of “considerable risk” that costs will rise by another 20% to £106bn from the current estimates of £80bn to £88bn.
The report also raises alarm bells over the project’s management.
It states: “The review has not seen convincing evidence that HS2 Ltd, especially the phase one construction team, have the level of control and management of the construction normally associated with major projects.”
The report also recommends that work on the second phase of the project from Birmingham to Leeds and Manchester is paused for six months while other options for the route are considered.
Construction leaders are cranking up the pressure for HS2 to be given the go-ahead and are known to be lobbying hard behind the scenes for a government green light.
One industry source said: “Overall the report looks like a recommendation to go ahead but there are lots of negatives in there as well.”