George Osborne has been forced to deny claims he helped obtain a £600m detour of the controversial high-speed rail link where it passes through his constituency.
Critics of the HS2 network have pointed out that plans unveiled this week show there is a dog leg in the line, meaning it avoids some of the more affluent areas of Tatton, Cheshire.
They argue that the extra six miles of train line on the branch between Birmingham and Manchester will cost more than £90m per mile.
Campaigners have accused the Government of double standards because officials insisted the first section of the route, between London and Birmingham, had to be straight.
HS2 route to Manchester (Pic: Dep of Transport) The Department of Transport denied on Monday that the Chancellor's constituency had been given any sort of special treatment.
But the row resurfaced on Wednesday when Cheshire East Council's leader Michael Jones suggested Mr Osborne had taken part in efforts to influence the route.
In a press release, he reportedly said: "Your MPs George Osborne, Edward Timpson and I have fought hard to keep the line away from Knutsford and Tatton, which we have been successful in achieving.
"Throughout the process we raised concerns about the line of the route and raised the profile for a commonsense solution, which I believe we have achieved. This is great news for Cheshire East and for Crewe in particular."
The council was forced to retract the statement within hours and issue a correction.
Its later statement said: "In a press release, Cheshire East Council stated that George Osborne had fought hard to keep the HS2 rail link out of his constituency in Knutsford and Tatton.
"In fact, this is not the case and MP George Osborne had no say whatsoever over the proposed route of the HS2 link. We are happy to set the record straight."
A spokesman for Mr Osborne added: "Cheshire East put something out but corrected it when they realised they were wrong. George has never sought to influence the route."
Labour leader Ed Miliband used the row to bait the Chancellor during PMQs, saying her should "less time worrying about how to divert high-speed rail routes away from his constituency".
Mr Miliband began to read Mr Jones' comments but was cut off by the Speaker as the volume of heckling from Tory MPs threatened to drown him out.
David Cameron pointed out that the route would go "right through the middle of the Chancellor's constituency".
The planned route misses some of the most expensive residential areas in Britain and it is set to go through Crewe, with hopes the town will become a major hub.
The Department of Transport said earlier this week: "The design of the route through the constituency followed the same process as it did everywhere else and it is wrong to suggest otherwise.
"The initial preferred route has been chosen to provide the best possible service to Liverpool, Manchester Airport and West Coast Main Line links to Scotland.
"As elsewhere, the route balances passenger demand, cost, engineering and sustainability."
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