The city council’s transport and environment committee voted to endorse the final business case for the project, which will now go before the full council, recommended for approval, on March 14.

If approved by the full council next month, the extension would be funded by borrowing paid back by future ticket sales – meaning no money is being taken away from public services.It will also be funded by a £20m dividend from Lothian Buses.

Conservative transport spokesperson, Cllr Nick Cook, raised concerns that Lothian Buses could see “significant operational disruption” leading to “higher fares and possible job losses” caused by the overhaul.

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Artist's impression of a tram on Elm Row

He added: “A decision on the tram is a choice. The money could be spent on other priorities. This is not a case of tram or nothing – to claim so is simply false.

“Without the Hardie Inquiry reporting, the council simply cannot say what the financial implications of this project to the tax-payers will be.”

Senior responsible officer for the tram project, Hannah Ross, said: “A delay to wait for the inquiry would cause difficulties in retaining the advisory team and contractors being told to wait could incur a cost to the council.

“Hardie may have findings that the council may want to incorporate at a cost.”

Ms Ross told councillors that a business support fund of £2.4m, will include support that is “tailored for the variety of businesses on Leith Walk”.

She added: “We will ensure we leave the route in the state that we found it when we started.”

Community councillors raised concerns about the proposals.

Harald Tobermann from Community Councils Together on Trams, said: “Traders are very, very worried. They have not been physically contacted by a person from the tram project. They are worried because of the uncertainty of what will happen.”

He added: “If done well, the tram project will be an important opportunity for our area and other areas. It will bring economic benefit and community councils will give qualified support for the project.”

Andrew Mackenzie from Leith Links Community Council said that Constitution Street could become a “sterile two-way tram corridor” and that the plans will “compromise public safety”.

He added: “Constitution Street, just 12 metres wide in some parts, is too narrow for the tram.

“It could be very beneficial and work very well. In this particular pinch point, it’s not a finished and acceptable design for folk on the ground.”

Liberal Democrats are also opposing the plans.

Lib Dem transport spokesperson, Cll Gillian Gloyer raised Brexit risks.

She said: “Where we are is an environment of huge uncertainty. I don’t believe we have got it right this time.”

Green councillors have asked for more assurances that Lothian Buses will not be financially impacted by the project.

Green transport spokesperson, Cllr Chas Booth said: “If that risk is realised, it could have really serious impacts. We need to treasure our bus services.

“Tram lines succeed in moving volumes of people and tackling congestion and emissions. Greens are convinced that this tram proposal will provide investment in the city, for the long term.”

Councillors voted seven to four in favour of referring the final business case to full council for approval on March 14.

Transport convener, Cllr Lesley Macinnes, said: “This project is one of the most important things we can do for this city.

“The tram can be a major player in providing what the city requires. This is a process that has been done well.”