PFI projects set to cost tax payers 'over £300 billion'

Dave Prentis, general secretary of the Unison trade union, told the Guardian: “We’re sitting on a PFI debt time bomb, and the sheer scale of the burden paints a seriously grim picture for the future of our public services.”

PFI, introduced by John Major’s administration in 1992 and expanded dramatically under Labour, saw private companies take on the financing, construction and operation of public sector infrastructure projects.

The firms then lease the facilities back to public authorities, often over a long period.

The Treasury has calculated that future liabilities of PFI projects will cost £242 billion, but says this figure is reduced to £122 billion once expected inflation is taken into account.

A Treasury spokesman said: “The Government has already taken action to drive savings in PFI and, as part of its review of PFI aims to deliver a new, cheaper model, which will ensure a fair deal for the taxpayer now and in the longer term. The Government has for the first time published a clear assessment of PFI liabilities."