RAIL bosses have said they may not be able to bankroll Burnley's direct link to Manchester.

The news comes after the Government told Network Rail to slash its next five-year budget by £3billion.

It means schemes that are not already approved by the company may not be handed cash - including a multi-million pound scheme to reinstate the Todmorden Curve linking Burnley's Manchester Road station directly to Manchester.

Town leaders have said linking up with the city - which expects 100,000 extra workers in the next decade - is essential for Burnley's future prosperity.

And they had hoped to land the bulk of the £4million needed to reopen the Todmorden Curve from Network Rail.

But a spokesman said: "If the work is not already in our strategic business plan for 2009 to 2014, and if it's not funded by the rail regulator in the next period, the chances are that we will not be able to fund it."

However, a Burnley Council boss and a leading councillor have insisted the direct link will go ahead, with the North West Development Agency (NWDA) and Lancashire County Council still expected to pledge cash to the scheme.

Chief executive Steve Rumbelow said: "We are cautiously optimistic about the Todmorden Curve. Our view is that it must happen and we will make it happen.

"We will be pressing the NWDA to fund it but if they don't, we will look at other sources.

"The direct link to Manchester would not just benefit Burnley, it would benefit areas like Hyndburn too."

The council was "absolutely" committed to reinstating the Curve, he added.

He said Network Rail had a regional "discretionary" fund for schemes less than £5million which he was hopeful the council could tap into.

Coun Martin Smith, executive member for regeneration and economic development, added: "We would still be hopeful that it will go ahead."

Bosses at Network Rail were told by the Office of Rail Regulation yesterday ((THURS)) that the company would be offered £26.5billion for the next five years and not the £29.5billion it requested.

The money is for Network Rail's running, maintenance and improvement of Britain's railways for 2009 to 2014.