Somerset Council is planning to push the government for funding for road improvements following a decision to shelve a major dualling scheme. The local authority said the cancellation of National Highways’ £328m upgrade of the A358 between Ilminster and Junction 25 of the M5 at Taunton was “deeply disappointing”.

The works were first paused in the summer, but chancellor Rachel Reeves has now pulled the plug on the project, which she described “as unaffordable and unfunded”.

Richard Wilkins, Somerset Council’s lead member for transport and digital, said the local authority would “lobby hard” for government support and funding to deliver smaller-scale improvements on the route.

“This is of course disappointing news for Somerset,” he said. “The A358 is a vital transport artery linking London and the South East to the South West, it is crucial in terms of growing the economy.”

According to Somerset Council, upgrading the A358 as part of a wider A303 corridor improvement would have helped to significantly cut carbon emissions, boost the local economy by billions of pounds and created more than 20,000 jobs.

“Somerset Council is now very keen to work with National Highways and the Department of Transport and our partners Peninsular Transport to understand what is possible and we will redouble our efforts to secure government funding to ensure improvements can be made,” added Mr Wilkins.

“In particular, we want to see what can be done to ease congestion and reduce pollution around the Henlade section of the A358. This is the end of one chapter but it is absolutely not the end of the road when it comes to improving this crucial transport link.”

A scheme to build a tunnel on a section of the A303 under Stonehenge was shelved in July. The decision was slammed by business groups, which said at the time that axing the scheme would put the economic growth of the West Country at risk.

Peninsula Transport, which represents the five lead transport authorities in the South West, said it was also “disappointed” by the A358 decision.

Programme director Hannah Shrimpton said: “We remain firmly of the view that investment into much-needed road improvements to the A303 corridor including the works at Stonehenge and the A358 to the east of Taunton are essential to creating a second strategic route and delivering sustained economic growth in the South West peninsula.

“Whilst the Budget announcement is disappointing, we will continue to support the Department for Transport to ensure that they look at other ways to alleviate connectivity issues in the region.”