A showdown looms over the biggest transit project in the Twin Cities after the head of the agency building the light-rail line to Minneapolis' southwest suburbs on Wednesday rejected calls to explore new ways to reroute freight rail traffic to make room for it.

The decision by Metropolitan Council Chairwoman Susan Haigh came as metro leaders complained bitterly about the role of the Twin Cities & Western Railroad in the development of a costly and unpopular rerouting option under consideration by the agency.

"If we don't satisfy the railroad … we're stuck," Minnetonka Mayor Terry Schneider said.

The metro mayors and other leaders reacted to news that a consulting firm funded by railroads refused to research alternative reroutes, citing a conflict of interest.

"They took a pass because their funders, the railroad, probably didn't want them to do it," Hennepin County Commissioner Peter McLaughlin said.

Haigh's decision makes it likely that the metro leaders will face a choice next week between rerouting the freight over two-story berms in St. Louis Park or leaving it in a Minneapolis corridor and sinking the light-rail line in two tunnels nearby. Their recommendation will be forwarded to the Metropolitan Council, which is expected to pick an option in early October.

The reroute and the tunnels are opposed by determined groups of local residents and would contribute $200 million or $160 million, respectively, to the price of a project estimated to exceed $1.5 billion. Met Council engineers Wednesday also detailed $217 million in possible cost-cutting measures, including shortening the line, eliminating a suburban station and building only one LRT tunnel.

Peter Wagenius, an aide to Minneapolis Mayor R.T. Rybak, has questioned whether the reroute features are needed for safety and service or enhance the railroad's business. He asked Haigh if she would find another consultant to explore reroute alternatives "so we would be in a position to push back against the railroad's desires."

Haigh replied there is urgency to moving forward with key decisions on the project so that it's ready for more funding by the Legislature next year. "I'm not sure … that we can delay and spend more time trying to find additional experts," she said.

Construction on the project is scheduled to begin in 2015, and the line is expected to open in 2018 between Minneapolis and Eden Prairie.

Met Council engineer Jim Alexander told the metro leaders that Transportation Technology Center Inc., of Pueblo, Colo. (TTCI), decided against analyzing other potential reroutes in and around St. Louis Park after meeting Tuesday with representatives of Twin Cities & Western, Canadian Pacific and Burlington Northern Santa Fe railroads.

"They felt they would be in a compromising position," Alexander said. "They are essentially paid by the railroads."

The president of Twin Cities & Western, Mark Wegner, who attended Wednesday's session of metro leaders, denied in an interview that the railroads opposed Transportation Technology Center's conducting more analysis but questioned the need for it. "How much validation do you want?" he asked.

Alexander said that the railroads maintained "there was no need to turn over the stone" for more alternatives.

On Tuesday, Transportation Technology and staffers from the Met Council Southwest project office, the cities of Minneapolis and St. Louis Park and Hennepin County toured the berm and tunnel sites. They later met with representatives of the railroads to discuss details of reroute alternatives.

"At some point, TTCI said they were uncomfortable with how this was proceeding," Met Council spokeswoman Laura Baenen said. Met Council staffers suggested that Transportation Technology meet separately with the railroads to discuss the options. The consultants met with the railroads and later declined to do more analysis, citing a conflict. They declined Wednesday to comment.

Wagenius questioned why the firm didn't raise the conflict issue before coming to the Twin Cities. "They didn't raise it until after they had the meeting with the railroads," he said.

Pat Doyle • 612-673-4504