The long awaited Crossrail scheme took a major step forward this week after private sector beneficiaries agreed to contribute more than £1bn towards the £16bn east-west London rail link.

The City of London Corporation, Canary Wharf and BAA are each understood to be willing to donate hundreds of millions of pounds to finally get the scheme off the drawing board. However, the exact nature of their contributions still remains unclear.

Recent progress follows pressure from prime minister Gordon Brown, who has demanded that "all beneficiaries and the City of London" make a "significant" additional contribution.

Although it will not reveal the exact size of its contribution, the City of London is said to ready to pay £250m towards the scheme through an increase in business rates. In a statement, it said: "At a special meeting held this afternoon [October 2] at the Guildhall, the City of London's Court of Common Council voted, after lengthy discussion, to support a financial contribution to Crossrail."

Canary Wharf, which will be served by the Crossrail link, has reputedly pledged between £500m and £800m to the project, although this money is not expected to be paid up front. The funding is likely to come from a levy on new office space.

BAA's contribution is also unclear. "Crossrail is a complex project but negotiations are going well," said a spokesman for the airport operator. "We are confident of achieving an outcome that is satisfactory to all parties."

The spokesman said the figure of £300m that is being quoted in the press was "speculation only".

Although BAA's Heathrow Airport will benefit from the Crossrail link, direct services to the airport from the City and Canary Wharf would also abstract revenue from BAA's lucrative Heathrow Express service, on which 15 million passengers a year pay £15 each. Industry speculation has suggested that BAA's contribution may be simply to grant Crossrail trains access to the dedicated line that links the Heathrow with Paddington station.

London mayor Ken Livingstone said that Crossrail was now within grasp. "In the last weeks huge effort has gone into putting together a comprehensive funding package for Crossrail," he said, "something no previous government has achieved.

He continued: "I hope it will now be possible to agree a final overall funding package for Crossrail and for a positive announcement to be made."

However, there are fears within Transport for London that the Department for Transport may provide the money needed to bridge the remaining Crossrail funding gap at the expense of modernising LondonÕs Tube network. The collapse in July of Metronet, which maintains nine of the Underground's 12 lines, has left a £2bn hole in the budget for upgrading the network.

"While we are delighted that Crossrail is now very close to being approved, it will be cold comfort if the Tube is then starved of the money it needs," said a senior TfL source. "It should not be a case of one or the other because London desperately needs both to cope with the growth in population and jobs. But we are receiving worrying signals from the Treasury."

Another industry source recalled that in the 1990s when government funding was agreed for the Jubilee Line Extension, the last major underground line to be built in London, it came at the expense of funding to upgrade the Tube network. The collapse of Metronet, the source warned, has given the government the chance to back out of upgrading the Tube network again.

Outside of the capital there are fears that the rescuing Metronet and funding Crossrail at the same time would soak up all of the funding available for transport infrastructure projects. This could delay funding for modernisation of the Tyne & Wear Metro, and the expansion of the Manchester Metrolink and Midland Metro light rail systems.

The current Crossrail project was first proposed in 1989, but funding for the project was denied in a vote five years later. If a funding package can be agreed in the near future, Crossrail could be completed by 2015. The current scheme would see trains run from Maidenhead and Heathrow in the west to Shenfield and Abbey Wood in the east.

The decision by the City of London to offer funding clears the way for the government to announce that it has agreed full funding for the project prior to the final reading of the Crossrail Bill in parliament.