The £50bn High Speed Two rail link will not be extended to Scotland, as the team behind the project has found there is “no business case” for the undertaking.

The Scottish National Party reacted with fury when The Independent on Sunday passed on the news, its Transport spokesman Drew Hendry describing it as a “snub” to Scotland that ignored the “undeniable economic case” of a new railway linking London to Glasgow and Edinburgh. When the then Transport secretary Lord Adonis launched HS2 in 2009, he claimed it would be “the union railway, uniting England and Scotland, north and south, richer and poorer parts of our country, sharing wealth and opportunity”.

But HS2 is currently focused on reducing journey times from London to Birmingham to 49 minutes, before it splits into lines to Manchester and Leeds over two phases. However, it was hoped that HS2 would still ultimately reach Scotland, so commuters could travel from Glasgow and Edinburgh to London in three hours, against about four-and-a-half hours today.

A team at HS2 Ltd, the official organisation behind the project, is working on a fresh report into speeding up train times between the capital and Scotland, to be presented to its board later this year.

A source said that this team has moved on from the idea of extending HS2, to “enhancements” on existing lines. An engineering industry source also confirmed that an extension was no longer viewed as a tenable option.

Sir David Higgins, HS2 Ltd’s chairman, has previously hinted that an earlier report into the idea had found that enhancing existing lines was “more realistic”, but that no definitive conclusion had been reached.

Hopes have also been dashed that a proposal to link HS2 with the High Speed One railway from London to the Kent coast – the Channel Tunnel Rail Link – could be revived.

Some rail experts thought that this would be of huge economic benefit to the North and the West Midlands, as business leaders from Paris or Brussels could reach Manchester, Leeds or Birmingham without time-consuming route changes. 

The HS2 source said: “There are two things to know about HS2. One, it will terminate at Euston; two, it will not link up with HS1 or Scotland. HS2 is now looking at enhancements and there may be the odd bit of new track here and there, to reduce journey times between Scotland and London. There’s no business case.”

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Mr Hendry said that it would be “outrageous if the UK Government planned to snub Scotland on HS2”.

The SNP has previously argued that HS2’s construction should actually start in Scotland, rather than in the South.

Mr Hendry, who secured one of the big scalps of election night by defeating the Chief Secretary to the Treasury, Danny Alexander, in Inverness, Nairn, Badenoch and Strathspey, added: “Including Scotland in HS2 would be transformative, and not only deliver greater economic and business returns but also maximise environmental benefits.

“The Westminster establishment ...  seems committed to keeping Scotland in the slow lane.

“There is an undeniable economic case to connect Scotland to the rest of the UK and the Continent. [It ...] will improve connectivity and remove barriers for businesses in remote and rural parts of the country.”

Business and political leaders in the North-east will also be furious as they believed any stops on a new line in the region would also benefit their local economies.

Tim Farron, the Liberal Democrat leadership contender who has called for high-speed railways to be built across the UK, said: “This shows a staggering lack of ambition for the economy of the North.”

HS2 Ltd’s board minutes from December show “a further update” on a Scotland link would be handed to the board in six to 12 months. The minutes stated that there had been a  presentation on Scotland that had discussed the “development of high speed rail and the enhancement of the existing route, including associated sustainability and environmental issues and topographical and geographical challenges”.

An HS2 Ltd spokesman said: “Work on improving the links to Scotland is ongoing.”