The US Department of Transportation has announced plans to cancel $929m of federal funding for the California high-speed rail project.

The move comes a week after California Governor Gavin Newsom announced plans to scale back the $77.3bn high-speed rail project due to increasing costs.

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The Federal Railroad Administration (FRA) stated its intent to halt the previously approved funds to be paid for the project.

"The department will also explore legal options to recoup $2.5bn already awarded to the state for the construction of the rail line."

Additionally, the department will also explore legal options to recoup $2.5bn already awarded to the state for the construction of the rail line.

FRA Administrator Ronald L Batory notified the California HSR Authority (CHSRA) of this action in a letter, where it was stated that the CHSRA has ‘failed to comply with the terms of the agreement and failed to make reasonable progress on the project’.

Under the revised plan, only the under-construction 119-mile (191km) section between Merced and Bakersfield will be completed.

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Initially, a 520-mile (826.8 km) high-speed rail system was planned in order to reduce traffic in the state. It was scheduled to begin full operations by 2033.

The federal government committed a total of $3.5bn for the project, while California voters in 2008 approved around $10bn in bond proceeds to build the high-speed rail.