The shock decision to shelve plans to extend the Croydon tram line to Crystal Palace has been condemned by angry shopowners and residents as a huge body-blow to area.

Since a major public consultation on the plan in 2006 they have pinned their hopes on the extension bringing more prosperity to the area - encouraging new shoppers and improving commuter links to surrounding areas.

The new line, which had been expected to be built within five years, would also have helped alleviate traffic congestion that many feel is choking Crystal Palace and has cut trade by up to 50 per cent.

But last week the Mayor of London, Boris Johnson announced he was moth-balling the scheme for lack of funding - at the same time as he announced a multi-billion pound 10-year investment plan for transport in the capital.

It is now estimated the extension could not be reintroduced into TfL’s plans before 2016.

Crystal Palace Triangle traders representative, Sue Nagal, said the decision would be a massive blow for businesses that gave the scheme virtually unanimous support.

She said: “I can’t emphasise the seriousness of this decision enough. It could be the death of many businesses in the area.”

“The economic downturn means many are already struggling and some have already had to close,” she added.

“We had hoped the tram would be a huge lift to the area and many saw it as something that would save the area. Now everyone is just very despondent.”

Andy Stern, owner of Bambinos in Church Road said the scheme made financial sense so excuses about funding were not acceptable.

But he said although the news was a kick in the teeth for many traders and residents, they were encouraged by Mr Johnson’s assertion he is still interested in the extension if future funding is found.

The Mayor has asked Transport for London to carry out a study of the transport requirements in an area of London including Crystal Palace, which will provide the basis of future bids for Government funding.

But Val Shawcross, head of London’s transport scrutiny committee, London Assembly member for Lambeth and Southwark said cutting the Tramlink showed a lack of ambition by the Mayor who was abandoning outer London.

The Mayor said: “We need to focus on the projects that deliver real benefits for Londoners and let go of those that lack the funding for completion.

“At a time when Londoners are struggling, it is our duty to get maximum bang for their buck and invest in fully-funded schemes that we can deliver.”

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