Edinburgh's over-budget tram project is expected to cost nearly four times as much per mile of track than similar light rail projects elsewhere in the UK, a Government report has confirmed.

Figures published by the Department for Transport put the average cost of building tramways in urban conurbations at £25 million per mile, though this does not include Edinburgh, where costs have rocketed by £231m.

The report came as the true extent of traffic congestion in Edinburgh caused by tram repairs to Princes Street was seen for the first time.

The latest figures suggest that, at £776m, the predicted cost of building an eight-mile route connecting the airport to St Andrew Square in the city centre will be nearly £100m per mile.

But, in a sign that Edinburgh's experience has not damped enthusiasm in Whitehall for light rail, the DfT report found it could be used in other major cities if cheaper options could be found.

It has identified a number of factors which were said to have driven up light rail costs in the UK and made the option unattractive to councils, with diversion of underground utility pipes and cables emerging as the most significant factor.

The costs of constructing tram routes in Manchester, London, Nottingham, Birmingham and Sheffield varied significantly according to whether they were on off-street sections using disused railway routes or in city centre streets where major utility diversions are necessary.

Problems with utility diversions have played a major role in pushing up the cost of Edinburgh's tram scheme, not least because of the knock-on disruptive effect they have had on the track-laying programme.

In an upbeat assessment of light rail's potential for the UK, Norman Baker, the Liberal Democrat minister for transport, said: "Light rail is good for passengers, good for local economics, good for the local environment and it's a mode of public transport that passengers really enjoy using."

Transform Scotland welcomed the publication of theDfT's report and expressed hope its findings could lead to swifter progress in developing the Edinburgh tram project.

Spokesman Paul Tetlaw said: "We fully endorse what Norman Baker has to say on light rail. Despite what people may have been led to believe following the impasse over completion of the Edinburgh tram scheme, trams are indeed good for passengers, good for local economics and good for the local environment."