"Hundreds of millions of pounds" have been secured to ensure that Tube upgrades will continue after the collapse of the maintenance firm Metronet.

The company, which maintains two-thirds of the Underground network, yesterday went into administration over a £430 million hole in its finances.

Despite the move, the Tube would keep running as normal, London's transport bosses said.

London mayor Ken Livingstone said: "My message to all Tube users is that they should be assured that this will not undermine services and that all trains will continue to run and all stations will remain open."

Four directors of the accountants Ernst & Young (E&Y) were yesterday called in to run Metronet after the firm failed to fulfill its two Tube contracts worth £17 billion.

Metronet worked on nine of the 12 Tube lines - Bakerloo, Central, Victoria, Waterloo & City, Circle, District, Metropolitan, Hammersmith & City and East London.

E&Y administrator Alan Bloom said Metronet's managers would stay on to oversee the day-to-day running of the Tube until another firm takes over the contracts.

Mr Bloom added that he had arranged funding facilities of "hundreds of millions of pounds" for it to move forward.

It emerged yesterday that London Underground (LU) had been planning for months what to do if Metronet went into administration. It had set up a work group called Project Rocket to prepare itself.

The LU managing director, Tim O'Toole, said: "Our priority is the delivery of a safe and reliable Tube service for passengers and therefore we had no option but to undertake considerable planning for the possibility that Metronet's financial difficulties would require it to enter administration."

Metronet is one of two private companies - the other is Tube Lines - contracted to maintain and renew the government-owned Underground in a 30-year public-private partnership (PPP).

The PPP plan, championed by Prime Minister Gordon Brown when he was Chancellor, was fiercely opposed by London mayor Ken Livingstone and many others.

In recent months Metronet had been wrangling with Tube bosses for an extra £551 million to cover what is said were additional and unforeseen upgrade costs.

However, earlier this week the Tube PPP arbiter Chris Bolt ruled the firm should get just £121 million.

Adminstrators estimated Metronet's shareholders - WS Atkins, EDF, Balfour Beatty, Thames Water and Bombardier - may lose a minimum of £300 million.

Metronet said its staff should continue their work and would be paid as normal.

But the Rail, Maritime and Transport union said it was dismayed that Metronet's managers would stay on to run the business.

A spokeswoman for passenger watchdog London TravelWatch said: "Our thoughts are with the Metronet staff who have worked hard but have been let down by shareholders and the (PPP) business model.

"However, it is important that work that has been started to improve the Tube is not delayed. Also, we don't want to see the farepayer picking up the bill for all this."