Chris Bolt, the government's rail arbiter, should undertake an ``extraordinary'' review of Metronet's performance, and decide whether the company or the city should pay, Livingstone said at a news conference today in London. Metronet has a 30-year agreement to upgrade two-thirds of the 144-year-old railway.

"Virtually the whole problem is the result of poor management and a lack of proper penalties'' in Metronet's contract, the mayor said.

Livingstone has criticized the company for falling behind on station renovations and track repairs. Metronet pledged in its 2003 agreement with Prime Minister Tony Blair's government to spend 17 billion pounds on the railway in return for an annual payment of 600 million pounds. Its work is key to the biggest investment since World War II in the London Underground.

Metronet is jointly owned by WS Atkins Plc, Balfour Beatty, Bombardier, EDF Energy SA and Thames Water. Each should be forced to pay 150 million pounds, the mayor said.

The company maintains the District, Circle, Metropolitan, Hammersmith & City, East London, Bakerloo, Central, Victoria, and Waterloo & City lines.

Industry Standards

Metronet says its work has improved and it wants a negotiated settlement with the city over who will pay the additional costs. If the two sides can't agree, the company will ask Bolt to conduct a review, with a decision likely around April 2008, said Paul Emberley, a Metronet spokesman.

"We are determined to recover the costs due to us and believe we have good grounds for our claims to be successful,'' Emberley said, in a telephone interview.

The costs include a 90 million-pound upgrade on the Central Line to fix trains that London Underground had failed to maintain before Metronet took over, Emberley said.

"The Central Line is performing the best it ever has as a result of the work we've done,'' Emberley said.

Bolt identified the 750 million pounds in extra costs in a Nov. 15 review of Metronet. In that report, he found the company hadn't performed in-line with industry standards during the first three years of the contract.

'Bear the Costs'

Livingstone said the company has run up extra costs because it's inefficient, and it wants Londoners to pay. Tube Lines Ltd., the railway's other main contractor, doesn't have the same problems, he said.

"It's our strong position that it's Metronet shareholders who should bear the costs of the 750 million pounds rather than London rate payers or fare payers,'' Livingstone said.

Metronet has turned around its business by replacing the chief executive in 2005, hiring a new chairman last year and re- bidding contracts, Emberley said.

Moodys Investor Service said in a Nov. 24 report that ``Metronet's performance needs to improve from prior levels in order to avoid cash-flow strain.''

The government and the Tube contractors are spending 10 billion pounds over five years to ease overcrowding and improve service after decades of under-investment in the railway known locally as the Tube.