Public Interest Alberta says Ottawa has forced Edmonton city council to turn over operations of the proposed southeast LRT line to a private company.

The group claims that councillors approved the arrangement during an in-camera meeting on Aug. 29th after learning federal officials were threatening to withhold up to $300 million for the project unless they allowed a private company to both build and run the line.

"Many of the sources that we've spoken to have said, flat-out, they felt under incredible pressure," said PIA executive director Bill Moore-Kilgannon.

"We all want the southeast LRT to go ahead but we should not be in a situation where the federal government is dictating to a locally-elected council about the privatization of our public transit system."

PIA, along with the unions that represent transit staff and outside workers with the City of Edmonton, are asking why the matter wasn't discussed in public.

City councillors had earlier agreed to build the southeast under a P3 arrangement, but not to having it operated by a private company.

Stu Litwinowich, president of Local 569 of the Amalgamated Transit Union, wonders what the arrangement will mean for transit users.

"Is there going to be a difference in fare structure?" he asked. "Are people on the normal lines thoughout the city going to have to pay extra to get onto that southeast line?"

Some councillors won't discuss what happened behind closed doors at that meeting in August, but others confirmed that the federal money came with strings.

"I mean they changed the rules at the 11th hour on us, and bascially told us if you don't go the full P3, you're not going to get the money," said Coun. Dave Loken. "So I guess that's kind of holding the gun to our head."

While Loken voted in favour of privately operating the line, Ben Henderson was one of two councillors to vote against it.

"If a constituent has a problem with something and phones up, their only answer will be, we don't have control over that," he said.