The Government is reportedly demanding cash-strapped TfL extends the congestion charge as far as Catford in exchange for a bailout.

Ministers are further demanding that travel entitlements for children and older people are downgraded in return for what would reportedly be a £1 billion package.

Under the proposed congestion zone extension, drivers would face £15 charges for travelling from one place to another in south London.

Deputy mayor of London Heidi Alexander told a meeting of TfL's finance committee: "Neither the mayor or I can see how it would be right to charge people £15 to drive a mile from Wandsworth to Clapham, or from Catford to Lewisham, from October next year if the congestion charge was to be extended out to the North and South Circular.

"That is in effect what the Government have said to us that they want.

"We can't see why we should take free travel away from under 18s or over 60s when lots of people in London are actually facing some genuine hardship over the coming months."

There is "collective responsibility" in Whitehall as well as City Hall to ensure Tubes and buses continue to run, she added.

TfL boss Andy Byford described the two-week extension as a "sensible pragmatic solution" that "keeps people's minds focused".

He added: "We can now get this deal done.

"We really are very close, and it's absolute top priority for all of us to get this thing across the line, and I believe that the two weeks will suffice."

A spokesman for Mayor of London Sadiq Khan said: "The two-week extension will enable TfL to continue running safe, reliable and frequent transport services - which is more critical than ever as the capital enters Tier 2 and with Covid cases on the rise.

"Sadiq will continue to fight for appropriate longer-term funding for TfL, and a fair deal for Londoners."

A Department for Transport spokesman said: "We have agreed an extension to the support period and to rollover unspent funding from the Transport for London Extraordinary Funding Agreement, allowing further time for negotiations for a new settlement.

"These discussions will ensure London has a safe, reliable network. It would be inappropriate to disclose further details at this stage."

TfL's finances have been severely hit by the drop in travel caused by the coronavirus pandemic.

A £1.6 billion bailout agreed with Mr Khan in May put funding in place until Saturday.

It was reported last month that Mr Khan was seeking a £5.7 billion bailout to keep London's transport system going for the next 18 months.