Transport for London (TfL) has secured £1.6bn in emergency funding from the government to keep Tube and bus services running until September, as reported by the BBC.
On Thursday, Mayor of London Sadiq Khan warned that TfL would need to reduce services unless an agreement was reached by the end of the day.
But shortly after Transport Secretary Grant Shapps said he was "optimistic" about finding a solution, the deal was announced.
Government officials confirmed on Thursday evening that the Treasury and Department for Transport had agreed on a rescue package after weeks of negotiation with TfL.
Speaking at Thursday's Downing Street press briefing, transport secretary Grant Shapps said: "We don't know what the long-term will be."
"But in the short-term trains and buses will continue to run."
According to the Financial Times, as part of the deal, the government will undertake a review of TfL’s finances, which is expected to lead to fare increases in the coming months. The government will also put two people on the TfL board to increase its oversight.
The authority will also have to guarantee the return of all transport services back to pre-pandemic levels — higher than the 75 per cent level London mayor Sadiq Khan was aiming for next week.
TfL has also agreed to take adverts telling people to “Stay Alert”, the government’s controversial replacement for the previous “Stay at Home” anti-coronavirus ad campaign.
TfL has seen a 95 per cent reduction in journeys on the Tube, and an 85 per cent reduction in journeys on buses since the lockdown, leading to an overall fall in revenue of 90 per cent.
Yet the authority has continued to run 80 percent of bus services and half of regular Tube services.
It has furloughed 7,000 staff — a quarter of its workforce — and stopped 300 construction projects.