London Borough of Bexley Conservative leader Ian Clement has attacked the deal, which will see Transport for London (TfL) take responsibility for cost overruns.
Clement claimed that if the cross-London project goes over budget, future taxpayers and transport users will end up footing the bill. "It is a bad deal for Londoners. The mayor is writing a blank cheque, effectively gambling with taxpayers' money," he insisted.
It is understood that Livingstone secured funding of £5 billion and complete control of the project from the Department for Transport (DfT) after agreeing to fund cost overruns.
However, a senior Thames Gateway source said that if the project comes in on budget then TfL may have a surplus that it can plough back into transport schemes. He added that government and private sector cash could mean that fare receipts would not be needed to pay for the line, allowing them to be reinvested.
He said: "It is undoubtedly a gamble. If it comes off Livingstone will be a hero. But if it does not, it will be very painful for Londoners."
A DfT spokesman said that although the mayor has agreed to fund the first part of any overshoot, the department would step in if it increases too far. At this point the government would take control of the project along with responsibility for debts, he explained.