EDINBURGH councillors have voted to abandon a key section of the city's new tram line along Princes Street to St Andrew Square.
Following a warning that completing the route through the city centre could now cost £1 billion, it has been decided to limit the service to the section between the airport and Haymarket.
The crisis talks in the council chamber included LibDem councillors still urging completion of the line along Princes Street, but they were opposed by Labour and Conservative members, who won the day when the LibDems' coalition partner the SNP abstained.
A Labour resolution to abandon the Princes Street section was backed by the Tories, and passed with 25 votes.
Andrew Burns, the Labour Leader on the council, said: "The decision to complete the tram project to Haymarket is clearly the option with least risk and which leaves the city with an asset. It was the only option before council which provided a viable way forward, and I am glad that the council supported that option."
But council leader Jenny Dawe described the decision as 'hearbreaking'. She added: "I am really angry that Labour and Tory Councillors have rejected the professional advice of our chief executive and officers and some of the most highly regarded legal, technical, financial and engineering experts in the country.
"This was the option that was supported by the business community within the city and would have seen a profit realised."
Councillors had a new report before them which said completion to St Andrew Square would incur borrowing costs of £15.4 million a year for the next 30 years.
The price of abandoning the scheme altogether has also fallen more than once recently. Put at £750 million in June, which would have been only £20 million less than carrying on, the price tag for scrapping the project has now fallen to £651 million, while the cost of continuing through the city centre has risen to around £1 billion, once borrowing costs are taken into account.
The project, which is more than three years behind schedule, has been mired in a long-running dispute between contractors Bilfinger Berger and the council-owned tram development company TIE, whose own future is now in doubt.
Meanwhile, the city has bought 27 CAF-built trams which presently have nowhere to go. Tram chiefs have been trying to sell some of them to other operators, both in Britain and around the world, but so far without success.
One rebuff has come from Transport for London, which needs more trams for its increasingly busy network in the Croydon area. After being offered a leasing deal by TIE, TfL has now ordered six new trams from the Swiss builder Stadler instead.