The HS2 rail line will not be extended to London Euston unless enough private investment is secured for the project.
If cash is not put forward by private funds, the high-speed line will only run from Birmingham to Old Oak Common in the capital’s western suburbs.
This would mean passengers travelling to central London would have to change.
The government has said it is “getting a grip of plans” for Euston, adding there had been two “unaffordable designs” for a “gold-plated” station.
It has already cut the number of planned platforms for high-speed trains from 11 to six.
The BBC has been told the project at Euston would be dependent on private investment, with the government stating it would take on the “lessons of success stories” on other schemes such as the redevelopment of Battersea Power Station and King’s Cross station.
Old Oak Common will be the UK’s largest newly built railway station when opened, but there are concerns over the lack of options for onward journeys with government modelling suggests two-thirds of people would prefer to travel to or from Euston.
The Department for Transport (DfT) stated it wanted Euston station to “be open and running trains as soon as possible”, and that its “rescoped approach” would save £6.5bn.
A spokesperson said there was “already support and interest from the private sector”, adding that ministers had held discussions with key partners since the announcement.
“It is simply wrong to talk down the scale and benefits of this regeneration,” the spokesperson said.
To “get the best possible value for the British taxpayer”, DfT officials said they would “ensure that funding is underpinned by contributions from those people and businesses its development supports” and by leveraging “private sector investment”.
But critics have attacked the change in stance, with railway consultant William Barter, whose recent clients include the government, calling the new plans “totally unambitious”.
As part of the now scaled-back proposals, a planned pedestrian tunnel linking Euston station with the nearby Euston Square tube station has also been scrapped.