Peter Kennan thinks the high speed line will now stop in the East Midlands, saving an estimated £40bn.
The government has consistently said it will build it all the way to Leeds, with Sheffield served on a loop off the mainline.
But Mr Kennan, chair of the Transport Forum at Sheffield Chamber of Commerce, said he thought ministers would ultimately follow the recommendations of the National Infrastructure Commission.
Its report last year made it “very clear” that regional links should be the priority, within the financial constraints it was given, he said. But a decision about the fate of the eastern leg has still not been made.
Mr Kennan added: “I’m not being pessimistic, I’m being realistic based on the National Infrastructure Commission recommendations. I just wish people would be straight so we knew where we were.
“I just want the best for Sheffield, I’ve spent many hours on this. But we’re on hold outside the station.”
It is thought a formal announcement to ditch the eastern leg will be in the Integrated Rail Plan. The much-delayed report, which will also reveal the Government’s intentions for Northern Powerhouse Rail, was due in January.
Mr Kennan said he thought it would now be published with the spending review in the autumn so ministers could “blame the Treasury for everything and say it was the victim of cuts.”
He added: “The public finances are in a mess because of Covid, they’ve got to look for cuts and the costs of HS2 have ballooned. But there will be a political storm, especially in Red Wall seats and the spending review will be the hook to hang it all on.”
The cost of HS2 has shot up from £32.7billion in 2012 to an estimated £107.7bn today.
Mr Kennan said he agreed with the argument that cancelling the eastern leg risked creating an east-west divide as well as a north-south one.
HS2 was also needed to allow growth in local, regional and freight services on existing rail lines.
He added: “No amount of improvements to existing infrastructure will get close to decarbonisation of the transport system. HS2 is all about creating space on rail to get freight off roads and to increase passengers on local and regional journeys. There’s no chance without more capacity.”
A Department for Transport spokesman said no decision about the ‘delivery’ of the eastern leg had been made. But the Integrated Rail Plan would be published “soon” and they were committed to ‘enabling the East Midlands, Yorkshire and the North East to reap the benefits of high-speed rail services’.
He added: “The IRP will outline exactly how major rail projects, including HS2 phase 2b and other transformational projects such as Northern Powerhouse Rail, will work to deliver the reliable train services that passengers across the North and Midlands need and deserve.”
The IRP will consider how to ‘sequence’ the delivery of HS2 in the North to ensure benefits are realised quicker and ensure it is integrated with Northern Powerhouse Rail and other rail projects, he added.
In May, transport secretary Grant Shapps vowed to build HS2 in full but did not say when.