Privately funded alternatives to a scrapped section of HS2 would cost “considerably less” than planned high-speed railway, West Midlands mayor Andy Street said.

Mr Street and his Greater Manchester counterpart Andy Burnham have commissioned a group of private sector organisations to consider how to finance major rail improvements between the West Midlands and Manchester.

In October last year, Prime Minister Rishi Sunak cancelled the plan to extend HS2 between the West Midlands and Manchester amid spiralling costs.

The mayors’ coalition is chaired by Sir David Higgins, a former chairman of HS2 Ltd, and includes businesses such as Arup, EY, Arcadis and Mace.

One option being considered is building a segregated line – such as the one planned for HS2 – but with lower maximum speeds, reducing costs.

HS2 trains will run at up to 225mph.

At a joint press conference with Mr Burnham in Birmingham, Mr Street said: “In principle, it’s roughly the same line (as HS2).

“The key difference is obviously the question of the speed that the line would be.

“A lot of the cost in HS2, if you ask the design engineers, has actually come from this very uncompromising point about the speed.

“If you are prepared to compromise some of the speed, you do of course get a slightly longer travel time, but you do get a substantial option of reducing costs.

“That’s the option that’s been worked through.”

He added: “It can be done for considerably less than the cost of HS2.”

The mayors did not provide any cost estimates.

Mr Street said the possibility of trains stopping between Crewe and Manchester on a new line, unlike under the plan for HS2, would be considered, but “there won’t be 10 stops”.

Other possibilities include modifications to the existing West Coat Main Line, such as adding bypasses to the busiest sections.

Mr Street said: “One of the things that I’ve been calling out for many years now about HS2, as much as I believed in the principle of it, the notion that the state should take all of the cost on its balance sheet right from the start, I think is not the most efficient way of doing it.

“I really hope we will get something that may actually be of use well beyond this project.”

Mr Burnham said: “This is not just trying to do HS2 in a different way.

“It’s a different set of proposals that are coming forward.”

The mayors met Transport Secretary Mark Harper last week to discuss the work.

Mr Harper “indicated an open mind”, Mr Burnham said.

He added that a “do nothing” approach is “not an option” as that would be “damaging to economic growth in the regions” and “leave the UK with quite a serious transport headache for the rest of this century”.