The future of the long-awaited Carlisle western bypass was in jeopardy this week, as the bank funding the scheme narrowly avoided collapse.

Construction of the Carlisle Northern Development Route (CNDR) is due to start next spring under the Government’s private-financial initiative, with Franco-Belgian bank Dexia lined up to provide up to £143.8M. However, the bank fell victim to the credit crunch this week and had to be bailed out with a £5bn cash injection from the French, Belgian and Luxembourg governments.

While Cumbria County Council is still waiting for confirmation that the CNDR money will be provided, a cabinet meeting was held on Tuesday where members agreed to press ahead with plans and award the construction contract to its preferred bidder, Balfour Beatty. The Department for Transport and the Treasury still have to approve the final business case.

A spokesman for the council said: ‘We are in the midst of an unprecedented international banking crisis which has the potential to impact on a wide range of public sector investments. ‘The county council is monitoring the situation carefully, and we are in close communication with our preferred bidder, Balfour Beatty, and the Department for Transport.

‘All parties are confident that everything is being done to be in a position to move forward on the CNDR scheme.’ The CNDR will link the A595 at Newby West with Kingmoor Park and M6 junction 44 at Kingstown. The road was first proposed about 30 years ago, but has faced delays – most recently when the 2007 floods led to the redesign of the bridge over the River Eden. If the scheme goes ahead as originally planned, the road will open in spring 2011.