Announcing the Department for Transport’s delayed integrated rail plan (IRP), Transport Secretary Grant Shapps confirmed that the final eastern leg of the route would not be completed as originally planned.
Mr Shapps said that under the IRP better, faster routes would be delivered more quickly than under the “outdated” original plan for HS2.
However, critics have accused the Government of betraying residents and businesses in the north of England.
Under the original plans Phase 2B would have seen a high-speed spur run from Birmingham to Leeds via a new East Midlands Hub. Instead, under the revised £96 billion IRP the route will stop at the East Midlands hub and HS2 trains will then run on existing track to Sheffield.
Unveiling the IRP to the House of Commons, Mr Shapps said: “By taking a fresh look at HS2 and how it fits with the rest of the rail system, we will be able to build a much improved railway.
“This plan will bring the north and the Midlands closer together, it will fire up economies to rival London and the South East, it will rebalance our economic geography, it will spread opportunity, it will level up the country.
“It will bring benefits at least a decade or more earlier.”
Under the IRP, funding will be diverted to the Northern Powerhouse route, including electrification of routes between Liverpool, Manchester and Leeds.
The U-turn on the Birmingham-Leeds route, just nine months after Mr Johnson told parliament the eastern leg of HS2 would be completed, has been described as a betrayal by critics.
Shadow secretary of state for transport Jim McMahon told Times Radio: “We are not going to see the level of investment our region needs to thrive in the future.
“We want to hold the Government to account for the promises that they made because it goes beyond actually just transport investment. It goes to the heart of politics.
It’s important to say though the £96 billion has been announced, £40 billion of that isn’t investment in the north of England at all. That’s the Euston to Crewe link.
“This is not investment in the North, so the idea that we should be grateful for what we’re given, that the Prime Minister will do a tour of the North and the Midlands, claiming some kind of victory, I’m afraid is an insult.”
Former Labour minister Hilary Benn said the revised plan left a “huge big hole” in the middle of the north of England.
He said: “What is the logic in taking HS2 from Birmingham to East Midlands Parkway, building a new high-speed line from Leeds to Sheffield, but leaving a huge great big hole in the middle that would have Victorian railway engineers in disbelief to save, the Times says, £10.3 billion? What is the purpose in doing that?”
Shadow chancellor and MP for Leeds West Rachel Reeves, said the move represented misplaced priorities in government.
She told BBC Radio 4’s Today programme: “We had the budget just a couple of weeks ago and the Chancellor found money to scrap air passenger duty on short-haul flights.
“Two weeks later the Prime Minister says that they are going to scrap HS2 going to Sheffield and Leeds.
“If you can find money to cut the air passenger duty for domestic flights but you can’t invest in our rail transport infrastructure, I just think that is entirely the wrong priorities.
“The Chancellor should have had the guts to stand up in parliament at the Budget and announce then that this crucial transport infrastructure that will deliver the growth and jobs that we need in the north of England wasn’t going to go ahead and yet those carbon-emitting flights will be increasing.”