There is anger that a multi-billion pound project to build a railway line between Oxford and Cambridge has been classed as an England and Wales project.

The £6.6bn line will see no tracks laid in Wales, but because of the way it has been classified, it means the country will not benefit from any extra cash.

David Chadwick, Liberal Democrat MP for Brecon, Radnor and Cwm Tawe, told Radio Wales Breakfast it was “HS2 all over again”, while former Welsh Labour transport minister Lee Waters called for Westminster colleagues to “fix” the system.

The UK government said it was paid for through its “rail network enhancements pipeline”, which it said was funding projects in Wales.

Meanwhile the Welsh government’s transport secretary said a “pipeline” of work had been agreed with the UK government.

Chadwick said Wales was “being denied hundreds of millions in funding that could transform our own rail network”.

He added that Labour expected people in Wales “to believe the ridiculous idea that this project will benefit them and they are justified in not giving Wales the money it needs to improve our own public transport systems”.

Unlike Northern Ireland and Scotland, most of Wales’ railway is funded by the UK government, and not ministers in Cardiff.

Under the system used to fund the devolved nations, called the Barnett Formula, Scotland and Northern Ireland get extra money when more cash is spent on rail in England and Wales.

It follows the long-standing row over HS2 – deemed to be an England and Wales project – so Wales gets no extra cash, which would have been the case if it was classed as England only.

However, none of the track planned for HS2 will reach Wales.

Differing figures have been given for how much politicians think Wales is owed from HS2, from £4bn suggested by Plaid Cymru and the Welsh government in the past to £350m in the most recent figures from Welsh ministers.

On social network BlueSky, ex-Welsh Labour transport minister Lee Waters drew attention to comments made by the rail minister Lord Hendy, where he criticised the classification of HS2 a year before he joined the UK government.

Hendry told the House of Lords in 2023 that it was “strange that, as a consequence of spending on HS2, Scotland and Northern Ireland received additional funds as part of the block grant but Wales did not”.

Waters told BBC Wales: “The way the funding formula works does not pass the common sense test.

“The signs are encouraging that we’ll get more rail funding from the imminent spending review but we need to fix the system so that this doesn’t keep happening.

“It’s no good recognising the problem in opposition and then not sorting it when you get a chance in government.”

The TSSA rail union called for a rethink.

Its general secretary Maryam Eslamdoust said: “Our union strongly supports rail investment wherever it happens – and we welcome new projects like East West Rail that expand and modernise our network.

“But ministers in Westminster must be honest with the people of Wales.

“Labelling this project as benefiting ‘England and Wales’ when it delivers no new infrastructure in Wales undermines trust and risks depriving Welsh communities of much-needed funding for their own railways.”

Plaid Cymru’s Westminster leader Liz Saville Roberts said the classification was “absurd”.

She said: “The rail line lies entirely within England and will offer no benefit to Wales. On the contrary, its misclassification will deny Wales millions of pounds in desperately needed infrastructure investment.”

The Plaid MP claimed that Labour, having previously criticised the classification of HS2, have “abandoned their principles, and neglected the needs of the communities of Wales”.

The UK government said its rail network enhancements pipeline will pay for the redevelopment of Cardiff Central Station, improved level crossings in north Wales and support for the upgraded south Wales relief lines.

Welsh government Transport Secretary Ken Skates said it was “not new” that the “system used for paying for rail improvements… has historically disadvantaged us”, and previous governments had failed to change that.

He said the Labour UK government has “admitted that the Wales and Borders network has been underfunded in the past”.

Skates added the UK and Welsh governments had agreed “an ambitious pipeline of improvements that will make up for under-investment by previous governments”.

The Welsh government clarified that the minister was referring to schemes previously praised by his Westminster counterpart Heidi Alexander in a letter in January, including five new stations in south east Wales and investment on the north Wales mainline.

Railway funding has become a totemic issue for those who think that the way Wales is run is faulty; that it should have more of a say over how it runs its own affairs, and that the way it is funded is unfair.

That’s partly because of the state of our railways – the Labour UK government has itself admitted that they are historically underfunded.

But many of the current complaints stem from Welsh Labour’s previous criticism of how cash for building railways in Wales is not split from England, and the apparent reluctance now in Westminster to change that.

There may be some good news to come in the chancellor’s spending review – Transport Secretary Ken Skates has said he is “very, very confident” Wales will do well out of it.

But the row will likely rumble on unless the longstanding policy, which dates all the way back to the start of devolution in 1999, is overhauled.