Birmingham City Council's ruling Labour group has elected John Clancy as the authority's new leader.

The win last night was his first in five attempts after he repeatedly tried to oust long-serving incumbent Sir Albert Bore who formally steps down from the role next week.

Coun Clancy, member for the Quinton ward, secured a nail-biting victory in a four-hour election with just one vote dividing him and rival Penny Holbrook - 38 votes to 37.

The new leader will be responsible for a £3 billion budget and his first job will be to convince the Government-appointed Birmingham Independent Improvement Panel that his administration can make the necessary changes to lift the threat of government intervention early next year.

He also has to swiftly get to grips with setting next year's budget, with cuts of more than £100 million expected in the Chancellor's upcoming comprehensive spending review.

Coun Clancy said: "I want to pay tribute to Sir Albert Bore for his dedication to Birmingham, his commitment to the people of Birmingham, for his leadership of the council and as leader of the Labour group for the last 16 years.

"Sir Albert has always put Labour values at the centre of his vision for Birmingham - he has brought world-class investment to the city and overseen the longest period of regeneration in the city's history."

He added: "There are challenging times ahead for Birmingham and now, under my leadership, the Labour group will continue the work already started to swiftly address the concerns of the Kerslake report.

"I will also ensure the good work already under way on the improvement agendas for safeguarding and education continues, alongside our commitment to improved partnership working and a more open and transparent council."

It took three rounds of voting by the city's 78 Labour councillors to settle the four way contest.

Coun Clancy won the first round with 31 votes, with Penny Holbrook second on 23.

Council deputy leader Ian Ward scored 22 and outsider Barry Henley got just one vote, his own.

A second round saw Coun Ward eliminated and Coun Clancy secure enough of his supporters' second votes to win the final run off.

Friends of Coun Ward, who has been Labour group deputy leader for ten years, say it is likely he will step down.

Coun Clancy's campaign pledges include extending free school meals to all children at council-run primary schools and tearing up its costly £85 million per year IT contract with Capita/Service Birmingham.

Coun Clancy: "I want to lead a city where every child, every citizen and every place matters."

During the campaign, he said his first act as leader would be to get out of the Council House and start talking to the city at large.

He is also expected to make sweeping changes to the leadership, with rewards for loyal supporters.

One of his staunchest supporters, Labour MEP Sion Simon said: "I've no doubt that John will be the political change that Birmingham needs right now.

"We're at such a critical turning point here in the West Midlands with the formation of the combined authority and a city like Birmingham needs strong, unwavering leadership and I know John is up to that challenge."

Opponents of Coun Clancy have suggested that his more radical policy agenda may scare the Improvement Panel, resulting in government commissioners moving into the Council House.

The leadership battle followed the resignation of Sir Albert Bore in October who has spearheaded the party for 16 years and spent two separate spells as leader of the council.

He had recently come under pressure as a result of the slow pace of improvement following last year's damning Kerslake review of the council.

Two senior councillors resigned, saying they had lost confidence in the leader, and within days he was gone.

Coun Clancy had challenged him four times since returning to the council in 2011 and been defeated each time. He will likely have to defend a challenge in May.