Politicians in the north have expressed anger at suggestions that the HS2 rail route to Leeds and Sheffield could be scrapped under cost-cutting plans. The high-speed network, which planned to connect London to Birmingham, Manchester, Sheffield and Leeds, could be halted in the Midlands, according to the Financial Times.

The claims are said to have come from the independent review panel led by the former HS2 Ltd chairman, Douglas Oakervee, who was asked by Boris Johnson in June to undertake a review into whether to scrap the railway.

A separate report last month suggested that the expenditure for the beleaguered project, which has been beset by delays, could soar by more than £20bn to £88bn.

Hilary Benn, the Labour MP for Leeds Central, said: “The government needs to understand that we will not accept HS2 to Leeds being cancelled. The north has been denied its fair share of transport investment for too long.”

Judith Blake, the leader of Leeds city council and transport lead for the West Yorkshire Combined Authority, said there would be “grave long-term consequences” for the economy in the north and east of the country if HS2 is not delivered in full.

Timeline HS2 - over-budget and behind schedule Show High Speed Two Ltd is set up by the Labour government to examine possibilities for increasing high-speed rail capacity in the UK. The project is split into two phases - London to Birmingham forms phase one, with phase two extending the route to Manchester and Leeds. The transport secretary, Conservative Justine Greening, announces the decision to build HS2. A judicial review is called into the HS2 decision. Lord Justice Ouseley upholds one of the 10 grounds for complaint about HS2 in the judicial review – the claim that the government had acted unfairly and unlawfully when consulting on compensation for homeowners affected by the route. The Conservative prime minister, David Cameron, describes the project as "absolutely vital" as MPs approve funding. The high-speed rail (London-West Midlands) bill is formally introduced in parliament. After freedom of information requests, a 2012 Department for Transport viability report into HS2 is released, revealing the department considered it unaffordable. Allan Cook replaces Sir Terry Morgan as chair of HS2, after the latter fails to deliver the opening of the Crossrail project in London on schedule. A report from the New Economics Foundation suggests HS2 will deliver the most benefit to London, and exacerbate regional inequality. A fresh government review begins into HS2 into whether the scheme should be approved, amended or scrapped entirely. The Conservative transport secretary, Grant Shapps, announces that full HS2 services between London and Birmingham will be delayed by up to five years to 2031, and that the final completion of the northern section of the high-speed rail network would likely be delayed by seven years until 2040. He also confirmed the budget had escalated from the official £56bn at 2015 prices to up to £88bn at today’s prices. After a period of review, prime minister Boris Johnson announces that HS2 will go ahead, alongside a package of measures aimed at improving bus and cycling links outside of London.

She said: “It would sacrifice the £600m of annual GDP growth forecast from better connections between Leeds and Birmingham alone, while also putting at risk the expected 50,000 additional jobs HS2 would create in the Leeds City Region.

“The lack of additional capacity provided by HS2 would put further pressure on an existing network which is already struggling to cope with demand, with 8% of East Coast Main Line intercity services already cancelled or significantly late and Leeds station the third busiest outside of London – and the fourth worst in the country for overcrowding at peak times.”

HS2 has suffered a multitude of setbacks, with the company building the high-speed railway having to postpone work affecting 11 ancient woodlands in Warwickshire and Staffordshire. The work had been due to go ahead this autumn but has been deferred until 2020.

In September, the transport secretary, Grant Shapps, published a report, which suggested the project could be delayed by up to seven years and run £26bn over budget. The warning was based on the results of a separate review carried out by HS2 Ltd, the government-funded firm building the railway.

Completion of the first phase between London Euston and Birmingham could be delayed by five years until 2031.

The report by HS2 Ltd chairman, Allan Cook, stated the original plans “did not take sufficient account” of the effect of building a high-speed line through areas that are densely populated and with challenging ground conditions.

A Department for Transport spokesman said: “The secretary of state has established an independent review into HS2 which will provide the department with clear advice on how and whether the project should proceed. We are not going to pre-empt or prejudice this work with a running commentary on the review’s progress.”