A £280 million rail project will open up "opportunities that will have real benefits for people living in and around Watford", according to the Chancellor of the Exchequer.

The Croxley Rail Link, which government documents show will cost £284.4 million, was given the green light this morning.

Parties involved in the Croxley Rail Link had been locked in discussions over who will be responsible for different aspects of the project, but this morning, it emerged the project would be going ahead and Transport for London would be taking over.

Last year the government had asked Transport for London to take on an "enhanced role" in the scheme, which will see the Metropolitan Line extended from Croxley to Watford Junction via Watford High Street and two new stations.

Mr Osborne said: “The Croxley Rail Link will open up new economic opportunities that will have real benefits for people living in and around Watford. Investment like this in Watford is possible because of the Conservative’s Long-Term Economic plan.

Richard Harrington’s hard work as a Conservative MP ensured I was aware of this project and its importance to the area.”

A letter seen by the Watford Observer from the Transport Secretary, Patrick McLoughlin, to Danny Alexander, Chief Secretary to the Treasury, states the “total scheme cost budget is £284.4m and up until very recently the scheme was facing a funding gap of £50m”.

The letter went on to say TFL will take over management and delivery of the scheme “on the understanding” that TFL will contribute £16m and the Department for Transport will contribute “the remaining £34m” and the government cash will be coming from the department's underspend in 2014/2015.

The letter added: “In order to take on the scheme, TfL will also need HM Treasury approval to increase their borrowing limit by £30.5m so that they can borrow against the Croxley farebox.

“Orginally Hertfordshire CC was planning to borrow this amount but TfL are better placed to take this over. Hertfordshire have no plans now to borrow so the overall impact on public sector borrowing is neutral.”

Watford Mayor Dorothy Thornhill said: “The link has been a priority throughout my time as mayor, and I am pleased that the main construction will start this autumn, with the first trains due in 2018.

"I've always been clear that the Croxley Rail Link is a transformational project for the town, and absolutely critical to unlocking Watford’s future economic potential.

"Watford is booming, and my Watford Borough Council colleagues and I are proud of our successes in bringing major investment to our area."