The Government last night gave its multi-million pound backing to plans for an extension of the Metro system in Birmingham and the Black Country.

The decision to support a new line in Birmingham city centre and Wolverhampton could prove a significant boost for the region’s economy and follows year’s of doubt as to whether a Metro extension in the region would ever get the go ahead.

The key projects would see a Metro link from Birmingham’s Snow Hill station to New Street Station and a circular route around Wolverhampton.

The West Midlands Passenger Transport Authority Centro has asked the Government for £25 million towards the £55 million Birmingham city centre extension and £53 million towards the estimated £70 million circular route around Wolverhampton.

The rest of the funds are expected to come from their own reserves as well as from private investors and local authorities.

This is a major boost for Centro, which was forced to put Metro plans on ice in 2006 after it lost out to £2 billion funding from the Government’s Transport Innovation Fund, which was dependent on the city accepting a congestion charge scheme.

Now Centro must put forward a business case to the Department of Transport for the project and, if approved, work on the Metro could be started before 2014.

Centro chief executive Geoff Inskip said: “This is very good news for the region. We’re delighted that the Government has endorsed the schemes that the West Midlands felt were the right ones to not only improve the region’s transport system but also help its regeneration in terms of jobs and housing.

“The Government’s backing shows that the region is on the right track.”

Centro chairman Coun Gary Clarke said: “I’m extremely pleased we have received funding support for these important projects.

“I look forward to seeing these schemes in place by 2014 and welcoming passengers on board while providing real choices for car drivers wanting to switch to more sustainable types of transport.”

Centro submitted its proposals to the Department for Transport as part of a ten-year vision for transport in the region.

Last night the DfT approved the projects in principle, enabling Centro to put forward a funding bid to the Department for consideration.

The scheme was included in the West Midlands Regional Funding Advice (RFA) which was put together by Advantage West Midlands, the West Midlands Regional Assembly, Centro and local authorities.

It advises government on key investment priorities up to 2018-2019 and lists which projects it believes £1 billion a year of public investment would be best spent on.

By voicing its support for the Metro, along with a package of red route schemes to ease congestion along key urban routes and the fast-tracking of small rail schemes including improvements to Kidderminster Station and Stratford Parkway Station, the Government is allowing them to enter the approvals process.

The detailed schemes will now be considered further on a case by case basis before receiving full approval.