A £30m funding hole has jeopardised the planned East London Line extension project which, if completed, would link Clapham Junction to Docklands by 2012.

Finance for the on-off project has reached stalemate, with the Mayor of London and Government each demanding the other stump up £15m to cover the shortfall.

Campaigners have said the long proposed rail link is vital for regeneration of the area and that, in the past, Wandsworth had been overlooked for infrastructure project funding.

The rail link would create the rail equivalent of the M25 around London by linking Clapham Junction to Surrey Quays, including a direct link to the City and Docklands.

Battersea’s Labour MP Martin Linton said the Government had already funded most of the East London Line, and the Mayor was compelled to ensure the extension goes ahead.

He said: “I’ve been campaigning for this line for 10 years and it would be a tragedy if Boris walked away from this scheme at the last moment. He can’t leave millions of south Londoners in the lurch.

“This line will put Docklands and the City and the Olympics within easy reach of south London and it will finally put Clapham Junction on the tube map.

“The Government has already invested more than £1billion in phase 1 of the East London Line extension, linking Highbury and Croydon, and has already offered to pay for more than half of the second phase.

“All Boris has to do is to put the last piece of the jigsaw into place. It would be a terrible betrayal of the people of south London if he balked the final hurdle.

“It’s vital to the economy of south London that this scheme goes ahead and I know that Geoff Hoon understands the importance of completing phase 2. I only hope that Boris Johnson understands that as well.”

A spokesman for the Mayor of London said the Government had to match the cash.

He said: “The Mayor has made it clear to the Government the extension of the East London Line is vital and he has put his share of the funding on the table.

“The Mayor hopes that if the Government shares his desire that the capital and its inhabitants be able to compete with the other great cities of the world then they will do the right thing and deliver the remainder of the costs required.”