OVERCROWDING on the Underground will double by 2016 if the government doesn't increase funding of London's cracking transport system by £4.6 billion.

A report, to be presented to the chancellor this week, said significant investment in the transport system was needed to keep London as one of the world's leading cities.

The Centre for Economics and Business Research found that in 2004 there were as many journeys made on the London Underground as there were on the entire national rail network.

"London's transport capacity is full and its businesses now rate transport as the most important spending priority for government, ' the report said.

The report, commissioned by London First, a business lobbying group, also recommended that an additional £600 million was needed to improve the skills and training of Londoners.

It said London had Britain's lowest employment rate, 1.5 million adults had low or intermediate skills and that 43 per cent of its children lived in poverty.

But Harvey McGrath, chairman of London First, said future social and economic prosperity in the whole of the country was reliant on London.

Research found that the London economy was 30 per cent more productive than the rest of the Britain and that almost 40 per cent of the country's export growth was generated in London.

"We cannot risk the UK losing its competitive edge and the Government must act now to ensure we don't squander London's hard-won success,'' Mr McGrath said.

"Any world class team has to work hard to safeguard its success, investing in new ways to stay ahead of the competition. The same is true for the UK.

"If London loses, the UK loses and this is an outcome we should not be prepared to consider. This is not a question of London versus the UK regions. It is the UK versus Frankfurt, New York, Tokyo and the emerging cities."