Christian Wolmar: 'Good old plucky Ken' basks in the glow of his defeat

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Judge gives go-ahead to Tube plans

Livingstone loses battle to prevent Tube using PPP funds

So the judiciary has not let the Government off the hook. In many ways, the much-prayed-for outcome within Whitehall was that the judge would rule against the Public Private Partnership, forcing a rethink.

While this might have been politically embarrassing in the short term, it would have been a lot less trouble than the protracted battle that lies ahead.

The London Mayor, Ken Livingstone, was always going to win, whatever happened in court. His defeat merely reinforces the "good old plucky Ken" view held by most Londoners. Indeed, he knew he was going to lose and pressed ahead knowing the case would do more damage to the Government's cause than to his.

Among great political battles, this is one of the more arcane. The ostensible issue was over whether the publicly owned London Transport was capable of procuring and managing the £13bn investment programme for the Tube which everyone agrees is essential.

The Government, pointing to the near doubling of the cost of the £3bn Jubilee Line Extension, argued that to allow London Transport to remain in charge of the investment programme would be like giving children free run of the chocolate factory. Treasury insiders have calculated that on London Transport's past record, around £5bn of public money would be wasted on the investment programme.

Therefore, they devised the fiendishly complex PPP to tie the hands of the mayor before the Tube was handed over to him – which should have happened a year ago but was delayed by the political wrangle and the complexities of the bidding process. Mr Livingstone, and his appointee as commissioner for transport, the American Bob Kiley, have argued that they would bring in private-sector companies to help with procurement so that the past errors of London Transport would not be repeated.

But can this argument really be about a debate on the merits of the procurement process of London Transport? No, of course not. Several sub-texts are lurking. The most obvious is the antagonism between the Government, notably the Chancellor, Gordon Brown, and Mr Livingstone. The whole Greater London Authority Act, which was at issue in this case, was framed so as to prevent Mr Livingstone, the likely mayoral victor, from having too much power. A Government genuinely interested in devolution and strengthening democracy would have handed over the Tube and the rest of the transport system, along with some tax-raising powers, to the mayor and let him or her get on with it, as happens in most European cities.

New Labour's hubris has left the Government in an invidious position. Far from ridding itself of responsibility for the Tube, it will now be blamed when anything goes wrong. Mr Livingstone wins either way. If he manages to make the PPP workable, he can claim credit. If it all goes wrong, as is likely – and worst of all, if there is major accident – the Government, and in particular Mr Brown, will carry the can.

Knowing this, ministers may yet try to squeeze a compromise out of Mr Livingstone and Mr Kiley over the coming weeks. However, since Mr Kiley walked away when a compromise almost materialised last month, don't bet on the sides coming to an agreement.