London’s embattled Garden Bridge project is back from the brink after a loan was agreed with Transport for London (TfL) to finance its construction.

Thomas Heatherwick’s design was on the verge of being canned after Lambeth Council, owner of the land to the bridge’s south side, withdrew its support because of the amount of public money promised.

But the council’s leader Lib Peck, Labour party’s mayoral candidate Sadiq Khan, TfL bosses and Garden Bridge Trust figures struck a deal that reduces the hit on public coffers. TfL will now be committing £10 million – down from an original £30 million – and will loan £20 million of public money if needed.

‘I’m pleased that Londoners are getting a better financial deal particularly at a time of austerity when all public sector organisations are being forced to make cuts to services,’ said Peck.

Khan, who is now backing the project after the cost to public coffers was reduced, says: ‘This is a much better deal for Londoners.’

Construction on the £175 million bridge is set to begin next year.