A review of HS2 by northern business and city leaders has called for control of construction of the high-speed railway to be devolved to the north and Midlands – and warned that its possible cancellation would leave no viable alternatives for transforming their economies.

The Northern Powerhouse Independent Review (NPIR), established to inform or pre-empt the government’s own review of HS2, recommended a new body, HS2 North, be established to integrate HS2 with proposed Northern Powerhouse Rail links.

Publication of a wider, government-commissioned review into HS2 chaired by Doug Oakervee had been expected as soon as this week but appears to have been delayed. There has been speculation it could recommend major cuts to the northern route, particularly the line between Birmingham and Leeds.

The NPIR panel warned that the Oakervee process was resulting in “significant damage” to trust in the government. It acknowledged that the government had “a duty to question [and] ensure the best oversight and governance”, but added: “The briefings of recent weeks, putting in doubt the eastern leg of HS2, are the height of irresponsibility … Those responsible have done the reputation of the government, specifically towards its commitment to the Northern Powerhouse, significant damage.”

The NPIR panel said building HS2 at the same time as a new east-west line would significantly increase the economic benefits of the schemes. Parts of an upgraded line network could be delivered now, it said, rather than waiting for the completion of HS2’s northern section, which could be as late as 2040, according to HS2 Ltd chairman Allan Cook’s own review.

The report claimed HS2 would create more than 110,000 new direct jobs in Leeds and Greater Manchester alone by 2050.

It recommended that HS2 North should be modelled on the Olympic Delivery Authority, arm’s length from government and overseen by Transport for the North to ensure all rail upgrades were combined with maximum value.

Chris Oglesby, the chief executive of property company Bruntwood and a member of the review, said: “HS2 and Northern Powerhouse Rail – a major priority of Boris Johnson and his government – are completely interlinked and a joined-up approach is required to both and the upgrades to existing lines. Further delays and uncertainty are hugely damaging to north and the country as a whole.”

Meanwhile, the CBI issued what it branded a historic joint statement from its chairs across six regions, saying: “Businesses needed HS2 to be built in its entirety, linking the east and west of the country as well as bringing the north and Midlands closer together.”

The future of the HS2 scheme has been in doubt since Johnson became prime minister and announced a review. Legislation for the first phase linking London and Birmingham has been enacted, while the bill for an extension to Crewe was reannounced in the Queen’s speech, leaving the northern sections most vulnerable to the axe.

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The transport secretary, Grant Shapps, announced last month that the cost of the entire scheme was now forecast to reach £88bn, with a construction delay of five to seven years.

Shapps said reports that Oakervee’s review would be delivered on Friday and recommend scrapping the eastern leg were “totally untrue”.

A DfT spokesman said the Oakervee review would “provide the government with clear advice on how and whether the project should proceed”.

He added: “As the prime minister recently set out, this government wants to drive growth across the north including through Northern Powerhouse Rail and giving local leaders a greater say in the running of the railway.”