Chancellor Gordon Brown will announce a super-casino tax of up to #6 million a year when he presents his Budget today.

He will take a share of the profits from so-called super-casinos such as the proposed leisure complex at the NEC, which has won the backing of both Birmingham and Soli-hull councils.

The tax could affect plans to deliver #35 million a year from the casino's profits to Birmingham City Council.

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Mr Brown plans to charge up to #5,000 a year for every unlimited jackpot gaming machine.

Regional casinos will be allowed to install up to 1,250 of the "class A" machines. This would mean paying the Treasury #6.25 million.

Gaming machines in existing casinos, which have limited jackpots, are currently taxed at #1,900 a year. This is set to increase to #2,400.

Mr Brown is expected to use the extra revenue raised to axe taxation on small-scale gaming machines, in a bid to help amusement arcades owners whose livelihoods are threatened by the new casinos.

A spokeswoman for the NEC said: "All we can say at this stage is there will be a maximum of 1,250 class A machines. The exact number has not been identified yet."

Birmingham has pulled out of the race to build a super-casino, throwing its weight instead behind the Solihull proposal for a venture with American casino operators MGM Mirage.

This is expected to create 3,000 jobs and contribute #350 million to the city's coffers over ten years. The decision by the city council's Tory-Liberal Democrat leadership put paid to Birmingham City Football Club's ambitious plan for a super-casino at Saltley.

Only one licence for a regional casino will be issued, although the Government could allow more in the future.

Even if Solihull wins, the NEC plan is not certain. The local authority would have to invite applications from interested parties, and gaming operators could present rival proposals.

Today's Budget will also include a paper on the financing of city regions, in preparation for a Government White Paper on reform of local government this summer.

David Miliband, the Local Government Minister, has visited the West Midlands urging local councils to consider ways of co-ordinating policy, possibly in a "Greater Birmingham" city region.

Mr Brown is expected to signal a fundamental shift of power from Whitehall to town halls - if councils agree to reforms.

City regions will be allowed to borrow money against their under-used property assets.

The paper has been written jointly by the Treasury and the Office of the Deputy Prime Minister, where Mr Miliband is a Minister.

The Treasury is also planning a wide-ranging review of the range of regeneration programmes and quangos it has put in place since 1997. According to reports, the Chancellor will also unveil a #20 million scheme to help to close the pay gap between men and women workers.

But he is unlikely to make major new spending announcements for health and education, as budgets for most public services have already been set until the Comprehensive Spending Review next year.

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