HOPES that the A1 could finally be upgraded to a dual carriageway all the way to Scotland look set to be dashed once again.

Government sources say they are mystified by reports that George Osborne is poised to finally give the go-ahead to the scheme – after decades of campaigning.

The Chancellor was said, by two national newspapers, to be planning the announcement as part of a £3bn-a-year investment programme, to be unveiled in June.

But one source told The Northern Echo: “We’re not sure how the A1 made it into the story. This looks like a flyer.”

Mr Osborne has already revived a Labour scheme to upgrade the dual carriageway between Leeming Bar and Barton, in North Yorkshire, to a three-lane motorway.

Work is due to start within 12 months, cost more than £300m and take three years, although fresh planning permission must be secured first.

But he was criticised for failing to announce progress in Northumberland, where the A1 peters out, north of Alnwick, into a single lane in each direction.

It has long been argued that the failure to upgrade the link to Edinburgh acts as a damaging drag on the North-East’s economy.

After the go-ahead was given to the North Yorkshire upgrade, the Treasury hastily agreed to order civil servants to work up a business case for the work north of Newcastle.

However, that was little over three months ago, making it unlikely that there is a workable scheme for the Chancellor to approve – even if he had the cash.

A second government source added: “There is money available for road-building, as part of the infrastructure fund, but no decision has been taken about the A1.”

In June, Mr Osborne will use a spending review to boost infrastructure projects, telling MPs, last month: “By investing in the economic arteries of this country, we will get growth flowing to every part of it.”

However, the fund will not pay out until 2015, making the announcement the last chance, in this parliament, for any hoped-for schemes in the pipeline.

Last December, the Chancellor was cautious when put on the spot about the failure to upgrade the A1 all the way to Scotland.

He told MPs: “It is certainly not off the cards. What I have committed to today is the dualling of the A1 up to motorway standard all the way to Newcastle.”

The spending review is expected to include Britain's second toll motorway, a £1bn project to ease congestion on the M4 in South Wales – a scheme first mooted a decade ago.

Other projects under consideration include adding lanes to the A303, to the south-west of England, and to the A47, which runs through the Norfolk Broads.