Cheshire East would go bust if the government doesn't give the go-ahead for the Middlewich Bypass because it couldn't cover the £26m it has already invested, the chair of the council's highways committee said.

The council is hoping to hear from the Department of Transport next month that it will award the grant funding of £46.78 million towards the cost of the long-awaited scheme.

This comes after it was put on hold in April last year by the previous government, which asked Cheshire East to look again at the costs, describing the business case as 'poor'.

At last week's meeting of the highways and transport committee at Macclesfield Town Hall, councillors were discussing a report containing several recommendations that would allow work on the scheme to start on site as quickly as possible, should government approval be given.

Cllr Mike Sewart (Poynton, Con) said: "I hope this scheme goes ahead. Middlewich needs it, Middlewich deserves it.

"But if it doesn't go ahead, if the government say no to this funding, what would be the revenue implications for this council?"

Cllr Mark Goldsmith. (Photo: Cheshire East)

Committee chair Mark Goldmith (Wilmslow, Ind) replied: "We've invested £26m into the scheme, a lot of that will be lost.

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"And that £26m would also become an expense we couldn't capitalise.

"So, whereas we were looking to pay that amount off over 25 years, we would have to pay it off in one year, and that could well – would, bankrupt the council.

"We don't have £26m of reserves to pay for that, as we all know well.

"The government may allow us to capitalise that, as they did with the investment in HS2, but they are unlikely to refund us that money.

"The whole process is extremely risky, as it were."

He added: "I think at this point of the process, after talking with the government for over a decade, having a public inquiry into this that took two weeks and approved it, that we should really be in a position to know what the hurdle is we have to get over at the final stage to get the funding, and that it should be automatically awarded, and we should not be waiting for the minister to make a decision on that.

"The implications are very big.

"We are lobbying the government hard to inform them, let them know that."

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Cllr Liz Wardlaw said the council got burned with HS2.

"Can I be confident that we are doing the maximum amount of work in order to prepare for this project with the maximum confidence that our money won't be lost," she asked.

Director of transport and infrastructure Tom Moody said: "As officers, we have done all we can in improving the original business case."

Cllr Goldsmith said: "While we're confident in our business proposal, and the pitch we've made to government, the whole process of funding these sort of major projects, leaves me with no confidence whatsoever.

"We backed HS2 because parliament promised to make it happen, and they didn't – and if we can't trust their word, then who can we within central government?"

The committee agreed the recommendations with 11 voting in favour and one abstaining.