By Jon Hurdle

PHILADELPHIA (Reuters) - Amtrak is in preliminary talks with New Jersey's public transit agency to study new options for building a passenger rail tunnel between Manhattan and New Jersey after an earlier project was killed over cost concerns.

Any project would be a new undertaking rather than a revival of the $8.7 billion tunnel project that New Jersey Governor Chris Christie killed late last month, saying the state could not afford likely cost overruns he said could reach $4.8 billion.

"We have been talking with them ever since the (previous) program was put in jeopardy," Cliff Cole, a spokesman for the U.S. national passenger railroad, said on Monday.

The tunnel controversy has symbolized a national debate on how to stimulate the stubbornly weak U.S. economy, with liberals arguing for more public spending and conservatives saying the country needs to reduce government spending and keep taxes low.

That played out in the November 2 election in which Republicans seized control of the House of Representatives and narrowed the Democratic majority in the Senate.

The previous tunnel would have been America's largest public works project, creating 6,000 construction jobs at a time U.S. employment is 9.6 percent. Construction had already begun, and about $600 million had been spent over eight years on design, engineering and digging.

When he killed the tunnel, Christie urged NJ Transit, the state transit agency and manager of the project, to work with Amtrak on new passenger rail options with new financial sources.

DOWNPLAY TALKS

A spokesman for Christie sought to downplay the importance of the current talks, saying the tunnel project as originally envisioned was dead and that routine discussions were taking place after the governor asked transportation authorities to "explore fiscally viable alternatives for a trans-Hudson tunnel."

"As such, we will continue to explore solutions to the trans-Hudson transportation challenge," spokesman Michael Drewniak said in an email.

Under the original financing deal, which was agreed to before Christie took office, New Jersey would put up $2.7 billion, the Port Authority of New York and New Jersey $3 billion, and the federal government $3 billion. Any overruns would be paid by New Jersey.

Paul Wyckoff, a spokesman for New Jersey Transit, described the talks as a "preliminary and exploratory" consideration of new ideas and not a revival of the former project. The U.S. Department of Transportation declined to comment.

Cole declined to comment on any financing options that may be available to Amtrak, which depends on U.S. government subsidies to operate.

To persuade Christie to reconsider his decision to kill the project, U.S. Transportation Secretary Ray LaHood offered $358 million more in cash, low-interest railroad loans and possible participation by private industry -- and said ending the project was "a devastating blow" to the state.

(Reporting by Jon Hurdle; Editing by Daniel Trotta, editing by Philip Barbara)