A major redevelopment of the railway station at Gatwick is under threat because of a funding shortfall, to the dismay of business leaders.

Network Rail (NR) announced plans to spend £30 million transforming the transport hub to increase the number of services passing through, along with passenger capacity.

The project would see a new platform created for the Gatwick Express service as well as bringing in the airport’s coach service to provide fully integrated public transport.

It was to have been completed in time for the 2012 Olympics but the plans have now been thrown into jeopardy by the Office of the Rail Regulator (ORR), which holds the NR’s purse strings.

The ORR has published what it believes NR should spend between 2009 and 2014, earmarking only £9 million for the Gatwick Station redevelopment.

The shortfall has been slammed by business leaders.

Jeremy Taylor, chief executive of Cadia, the business association for the Gatwick Diamond area, described ORR’s decision as “ludicrous”.

He added: “This is a fantastic opportunity to encourage people to use domestic train services and provide a suitable gateway to London in time for the Olympics.

“Once again, they are asking what is the minimum they can do, rather than opting for the maximum that they should be doing.”

Alistair Smith, chairman of the West Sussex Economic Partnership, said the £9 million would only pay for track replacement and improved signals at the station.

He said: “It’s only enough for a lick of paint. The Olympic body is always talking about legacy projects and this will be fantastic, not only for people travelling from Brighton and London, but for visitors coming from outside Britain.

“The proposal is out for consultation and we will be encouraging local authorities, businesses and organisations to come together and say that the ORR has got it wrong.”

A spokesman for NR said: “Obviously it is not what we asked for.

“We have said one thing and the ORR have said another so it is up to us to talk to them and other stakeholders in the industry to see where we go from here.”

A spokesman for the ORR denied the amount of money that the regulator is putting forward would reduce the scope and ambition of the station project.

He said: “The £9 million figure was not plucked out of thin air but by comparing what the work NR does with other companies undertaking similar projects.

“It is our belief that the amount will be enough for NR to carry out their business plan. Others may have a different idea and that is why we are consulting on it.”

People have until September 4 to contribute to the consultation.

The ORR will be publishing its conclusions on October 30.