The fire is believed to have started on or near a maintenance locomotive operating more than a mile underground at Swanscombe, Kent, on the line being built between Gravesend and St Pancras, Central London.

Firefighting crews in breathing apparatus braved searing temperatures as they battled through thick smoke to reach the locomotive. Thermal-imaging equipment was used in the search for the man.

A second man known to have been working at the scene was taken to Darent Valley hospital, near Dartford, with serious burns. As the remains of the burnt-out train were pushed out of the tunnel to West Thurrock, Essex, engineers were assessing the extent of structural damage caused by the flames.

It is feared that cables and signalling equipment, specially made for the project, may have been destroyed. Remanufacturing of this specialist equipment could take between six and eighteen months and threatens to delay the tunnel becoming operational. The construction of the concrete walls of the tunnel is complete and it is believed that the fabric of the tunnel is unlikely to have suffered in the fire.

A spokeswoman for London & Continental Railways, which is building the link that will ultimately connect St Pancras to the Channel Tunnel and on to Paris, said that although the fire was serious there was no indication that the 2007 completion date would be affected.

A spokeswoman for CTRL said that a fire broke out shortly after 7pm yesterday on one of its maintenance locomotives.

She added that there had been ?serious injuries? in the incident but that it was not thought that two trains had been involved.

"The fire started in a maintenance locomotive in the Thames Tunnel, which is part of the construction of section two of the rail link," she said.

"I have not been told that there was any sort of collision. Another train went in to get the locomotive out but I think the fire only involved one train."

A Kent fire service spokesman said: "The fire is now under control. One casualty has been brought out of the tunnel. Fire crews are still searching for a second casualty, who is believed to be fatal."

Firefighters from Essex were also involved in the operation.

A Eurostar spokeswoman said that none of its trains was affected by the fire.

The new link was a key element in securing London's successful bid for the 2012 Olympics. When it is finished, a fleet of 140mph Javelin trains will carry 25,000 passengers an hour from St Pancras to Stratford, East London.

Last month it emerged that the Government may need to find hundreds of millions of pounds to complete the construction of the line.

The CTRL was supposed to have been paid for entirely by the private sector but the first phase ran into funding problems when it became clear that passenger numbers for Eurostar were much lower than original forecasts.

In its latest report, the National Audit Office found that construction of the first section of the line, which opened last September, was completed on time and cost slightly less than the target set in 1998. The second stage is also expected to be finished on time but is likely to exceed the target price.