The eastern leg of HS2 to Leeds has been scrapped and a full high-speed east-west line linking Manchester to Leeds will not be built, the government has confirmed, as it said faster train journeys would be delivered earlier and cheaper under a £96bn rail plan. The high-speed rail network will go ahead to Manchester but will be curtailed at an existing east Midlands station rather than run from Birmingham to Leeds, while the TransPennine route will be improved mainly through upgrades rather than a new line. The transport secretary, Grant Shapps, told the Commons the changes and investment would bring better rail connections for passengers years earlier in a network that would work for every community. He said the Oakervee review of HS2 had shown a rethink was needed, and a subsequent National Infrastructure Commission report meant “a flexible approach” and “strengthening regional rail would be most economically beneficial”. An additional £54bn will be spent on upgrades and new lines, beyond the £42bn already committed to build the first phases of HS2 from London to Birmingham and Crewe. Shapps said the integrated rail plan published on Thursday was “ambitious and unparalleled” and would speed up intercity connections as well as improving local services. Trains from Manchester to Leeds will eventually take 33 minutes instead of 55 minutes, while Birmingham to Nottingham train journeys will be cut from more than an hour to 26 minutes, according to the Department for Transport. The plan would include a new section of high-speed line from Warrington to Manchester and the western fringes of Yorkshire, Shapps said. High-speed trains will run into the centre of Nottingham and Derby on the eastern leg using a fully electrified Midland mainline – an upgrade scheme that was scrapped by the government in 2017. Shapps said the plan, which includes a new West Yorkshire mass transit system around Leeds, would “fire up economies and level up” at least a decade earlier than building HS2 as originally intended, with some work expected to start by Christmas. The move has been met with anger and disappointment in the north of England and Midlands, with Labour describing the plan as “crumbs off the table” after promises of a full joined-up high speed network. The prime minister, Boris Johnson, said as recently as last month that the government would build Northern Powerhouse Rail (NPR), but the route that northern leaders hoped would be at the centre, a new high-speed line from Manchester to Leeds via Bradford, will not be built. Responding in the Commons, the shadow transport secretary, Jim McMahon, said the government “had completely sold out” the north. “We know exactly what Northern Powerhouse Rail means. They had repromised and recommitted 60 times. That opportunity looks set to be lost.” The Conservative MP Huw Merriman, the chair of the transport select committee, said the announcement showed “the danger of selling perpetual sunlight and leaving it to others to explain the moonlight”. He said ministers had long said it was not “either/or” HS2 or NPR, while people in the north would now think they had neither. Sir Edward Leigh, the Conservative MP for Gainsborough, said the north-east had “heard these promises again and again” to improve rail lines. He said while HS2 was “a white elephant”, it was now “a white elephant missing a leg”. The Bradford council leader, Susan Hinchcliffe, said by not routing a new line through the city the government had “missed a golden opportunity to make an investment which would have repaid itself many times over”, and it was “wrong-headed economics for the north and for the country”. She added: “There could hardly be a better test of the government’s commitment to levelling up than Bradford.” Andrew Adonis, the former transport secretary who launched the HS2 project in 2009, said it was “a betrayal of the north” and warned that the “economic geography of England may be seriously deformed” with a high-speed line that only serves the west of the country. However, Stop HS2 campaigners said the cancellation of the eastern leg of the project was “vindication of everything we’ve been saying for a decade”. A spokesperson, Joe Rukin, said: “You can deliver more benefits to more people more quickly for less money without the massive environmental impact by upgrading existing infrastructure, reopening old lines and providing sustainable local transport.” The HS2 line from London to Birmingham and Manchester will still go ahead. Plans for the HS2 station in Manchester may be revised to expand the surface station rather than build underground, potentially saving billions in construction costs. The high-speed line from Birmingham and Leeds will end at East Midlands Parkway rather than a planned new hub at Toton, between Nottingham and Derby. Lilian Greenwood, the Labour MP for Nottingham South, said local authorities had worked for a decade on how to maximise the benefits “and those plans are being thrown into the bin”. Rail experts said going with upgrades instead of new lines risked decades of disruption to services. The engineer and writer Gareth Dennis said it was impossible to deliver both more capacity and faster journeys without segregating high-speed trains. Darren Caplan, the chief executive of the Railway Industry Association, said it was “difficult to see this plan as anything other than a piecemeal approach”, adding that proposed TransPennine upgrades “had been promised time and time again since 2014, with millions of pounds spent on its design and shovels ready to go. These plans being torn up will only add yet more costs and delay work.” The Institution of Civil Engineers director of policy, Chris Richards, said: “It has taken us 12 years to get nowhere – we have to make the next 12 about progress.” It came as Transport for London (TfL) warned that the expiry of its funding from government on 11 December would result in tube and bus services in the capital being slashed by about 20%. Its commissioner, Andy Byford, said the current budget meant the city should prepare for “managed decline”. The London mayor, Sadiq Khan, said “levelling up Britain must not come at the expense of levelling down London ... Unless the government provides the long-term funding needed to maintain our public transport network, there will be no choice but to make significant cuts to services just as demand is growing again.”