A MAJOR scheme to ease congestion on the clogged-up A34 has been shelved by the Highways Agency.

But there is some good news for road and rail users today, as Transport Secretary Douglas Alexander gave the green light to an £88m transport package that will see the expansion of Oxford's rail station.

Improvements to the junction of the M40 and A34 south of Bicester had been expected to reduce queues at a notorious bottleneck that often brings the A34 to a standstill.

But motorists have learnt that the spiralling cost of the work means the Highways Agency is no longer prioritising improvements at junction nine of the M40.

Plans, first put forward several years ago, had included more traffic lights and extra lanes.

A Highways Agency spokesman said: "We tried to keep it in budget and sign it off at a regional level.

"Originally we were looking at between £3.5m and £5.5m. But once the detailed designs were drawn up, the cost was between £9m and £10m.

"This scheme has been assessed as no longer having sufficient justification for progression as a priority. Implementing this scheme as a priority would lead to delays to other projects that will more effectively tackle reliability and safety in the South East.

"We are now looking at alternative ways to deliver the scheme, making best use of public funds."

The announcement means that the scheme will not go ahead for years, if at all.

Oxfordshire county councillor Charles Shouler, who represents Bicester South, said: "It looks to me that it hasn't been put off, it's been cancelled altogether - which would be a disgrace.

"I am extremely disappointed. It's self-evident that improvements need to be made. What was proposed was only a minor alteration and only a limited solution but it seems that the Government hasn't even got the money to do the small amount of work necessary to increase the capacity."

But it emerged last night that the Government has approved the £88m Access To Oxford scheme to combat the city's chronic road congestion.

The package will see Oxford's station extended to the other side of the Botley Bridge, where one or more platforms for London trains will be created. Enhanced rail services between Oxford and Bicester will cut journey times from 30 minutes to between ten and 15 minutes.

Access to Oxford will also see sophisticated traffic systems introduced on the A34, with real-time information, variable message signing and variable speed limits planned.

Money will be made available to improve access to the city from the north and south, with bus lanes proposed on the Hinksey Hill slip road to speed up bus services between Oxford and Abingdon.

The plan was submitted to the Transport Secretary by the Regional Transport Board, which sees the package as crucial to plans to build thousands of new homes in central Oxfordshire.

David Robertson, county council cabinet member responsible for transport, said: "This is excellent news. It represents the largest sum for transport ever handed to Oxfordshire. We know the money is being made available so infrastructure is there to cope with the housing development planned in Didcot and Bicester.

"We are also encouraged by news that Network Rail is planning to upgrade the Southampton to Midlands route, which would help take heavy traffic off the A34."

Work on the Access to Oxford Project would be carried out between 2011 and 2016.

Mr Robertson also voiced disappointment that work on the A34 junction had been shelved.

"It is fairly obvious that this junction is a bottleneck," he said. "But perhaps improving a better flow on to the M40 might have only encouraged more traffic on to the A34."