London mayor Sadiq Khan has warned that “very difficult decisions remain” after Transport for London (TfL) published a revised budget.

He called on the Government to commit to bridging a £500 million funding shortfall in this financial year.

TfL was required to produce a new budget under the terms of its latest Government bailout which secured the continuation of services until December 11.

The transport body said the latest figures show a reduction in its funding gap for 2021/22 compared with its previous budget, published in March.

This is due to operational savings, the deferral of some capital spending into 2022/23, and the use of its own cash.

I urge ministers to treat TfL as they do the private rail operators, and commit to a long-term funding agreement

TfL said the budget means it will maintain current service levels, and will be able to complete station improvements, the introduction of greener buses, the next phase of signalling upgrades, and further work to encourage walking and cycling.

But the “short-term” funding package has restricted the delivery of active travel and borough-specific schemes, it added.

Mr Khan said: “London’s public transport network is essential to support our city’s recovery ​and improving ridership demonstrates the importance of being able to run safe and frequent services.

“But very difficult decisions remain as the pandemic has had a devastating effect on TfL’s finances due to the reliance on fare income.

“This is despite the fact that during my first term as mayor, TfL reduced their operating deficit by 71% and increased their cash balances by 13%.

“If we don’t get further Government support in December, there could still be a £500 million gap this year and so I urge ministers to treat TfL as they do the private rail operators, and commit to a long-term funding agreement.

“This is vital not only for the good of London, but for the whole country.”

Andy Byford, London’s transport commissioner, said: “Our staff, supply chain and other partners have worked magnificently to keep London moving, but the pandemic has shown our financial model, with such a disproportionate reliance on fare revenue, to be not fit for purpose.

“The revised budget will ensure our services operate safely, while keeping vital capital investment going.

“This budget protects service levels, supports economic ​recovery and will help build ​a greener economy.

“TfL is meeting its part of the deal with Government to get back to financial self-sufficiency. I now call on Government to truly engage with TfL to secure the long-term funding agreement that will drive London and the wider UK’s recovery.”

The £1.1 billion bailout agreed last month brought total Government support for TfL since March 2020 to more than £4 billion.