Business Secretary Vince Cable has given the green light to plans for a new local enterprise partnerships (LEPs) to support industry in Birmingham Solihull, Staffordshire, Herefordshire, Shropshire, Coventry and Warwickshire.
But local authorities in the Black Country and Worcestershire were told their proposals for new business agencies were not good enough.
And Dr Cable also rejected plans for an overarching West Midlands agency to co-ordinate the work of the rest.
The local enterprise partnerships, run by councils and business leaders, will replace Advantage West Midlands, the regional development agency.
Ministers received bids for approval to create seven local enterprise partnerships in the West Midlands.
But Dr Cable announced that four had been approved - and three had been rejected.
The bids which have received Government backing are Birmingham & Solihull with east Staffordshire, Lichfield and Tamworth; Coventry and Warwickshire; Stoke-on-Trent and Staffordshire, and The Marches, which covers Herefordshire, Shropshire and Telford & Wrekin.
Bids from Worcestershire and from the Black Country, which includes Sandwell, Wallsall, Dudley and Wolverhampton, have been rejected.
And a bid for an overarching West Midlands local enterprise partnership, submitted by Business Voice WM - against the wishes of local chambers of commerce - was also turned down.
Speaking in the House of Commons, Dr Cable said the Black Country bid was turned down because it did not have enough business involvement. But he said he hoped councils would submit a revised and improved proposal.
He added: “Several of the strongest bids were from the West Midlands”, and highlighted the Birmingham and Solihull, and Coventry and Warwickshire proposals as examples.
Ministers also declared the £1.4 billion Regional Growth Fund open for business. This is designed to support the creation of private sector jobs, particularly in areas which currently depend on the public sector to provide employment.
Local enterprise partnerships will be invited to bid for funding. Applications will be considered by a panel chaired by former deputy prime minister Lord Heseltine - and then by a second panel chaired by Nick Clegg, the Deputy Prime Minister.
Dr Cable said: “I was delighted that so many of the proposals for local enterprise partnerships showed real imagination and initiative and a genuine desire to drive local economic growth. I am pleased to announce that we are asking 24 of these partnerships to set up their boards and get to work.
“The knowledge and expertise of the private sector, local authorities and their local communities will be crucial as we work to create a better environment for business and ensure that everyone has access to the opportunities that growth brings.”
Communities Secretary, Eric Pickles said: “Over the last decade, the country’s economy became skewed by artificial boundaries and top-down prescription that did not work.
"We want to create a fairer and more balanced economy driven by private sector strength, and our plan for local growth will create local enterprise partnerships, reform the planning system and introduce development incentives for local authorities, like allowing them to keep their business rates, so all parts of the country benefit.
“I am delighted that we can announce today the first 24 local enterprise partnerships to be given the go ahead. Our vision for local enterprise partnerships will help transform the economic geography of the country by creating a new local dynamism that will encourage economic growth and protect business with proper local accountability.”
The LEP announcement was published alongside a Local Growth Plan, which Ministers said would set out new ways of increasing confidence to invest by creating incentives for local authorities in England to promote business growth.
These include a New Homes Bonus for six years from April 2011, which will give councils Treasury cash to match fund the additional council tax raised when they build new homes.
Ministers will also look at proposals for local authorities to keep the business rates they collect locally, reducing central redistribution.
A new system of Tax Increment Financing, first announced at the Liberal Democrat conference in September, will enable local authorities to borrow against future increases in business rate revenues.
And a new simple, streamlined and planning system will be designed to give communities and neighbourhoods more power over decisions, increase investor certainty and help international businesses locate, move within or stay in the UK.