Hackney could get its first underground railway network if new £12 billion proposals unveiled this week get the go-ahead.

The proposed route for Crossrail 2, a north to south express service, includes stops at Dalston and Hackney Central.

The scheme, put forward by business lobby group London First, would mean digging a massive tunnel underneath the borough.

Hackney Mayor, Cllr Jules Pipe, said: “It’s still a long way off and there will be many obstacles to overcome – especially when you think how many hills and mountains that had to be climbed to get Crossrail 1.

“But if it can be done then it will be fantastic news for the borough. It would have a terrific effect on Hackney, in a way that the East London Line and North London Line improvements have seen with more and more people coming into the borough”, he said.

“It’s the third transport facility that we have always lobbied for in Hackney over the past 10 years. Hackney has always been the only inner London borough without its own Tube station.

“There’s only one downside, and that is Hackney will be an even more popular place to live than it’s becoming already and that will inevitably drive up private house prices.”

Although it’s too early to rule out any demolition of homes or buildings, Cllr Pipe said compulsory purchase orders would be kept to a minimum because land surrounding both proposed stations had been protected in anticipation of the Crossrail 2 plans.

The planned route is thought to run underneath Stoke Newington and Clapton and, while Cllr Pipe said potential future scope to consider the two locations for stations was “interesting”, the £300-600 million per stop and construction needed in sensitive locations could rule it out.

If the plans get the nod, work would start in the 2020s and the new service could open in the early 2030s.

By that point, London’s population is set to hit 10million and the report detailing the plans which was released on Tuesday suggests that without Crossrail 2, some stations will be so congested they would be forced to close during the day to avoid endangering passengers.

Former transport secretary Lord Adonis, chairman of London First, said that without Crossrail 2, at least £6billion would need to be to injected into existing Tube and rail infrastructure.

London mayor and Islington resident Boris Johnson said: “The case for the construction of Crossrail 2 is incontestable and is made forcibly in this report.

“Over the next 20 years London’s population is forecast to expand to levels that will clog the Tube and rail arteries of our great city if we do not provide more capacity. There is no time to lose.”