Alistair Darling will announce this week whether or not the West Midlands will become a City Region, allowing it to get cash for urgently-needed transport improvements costing up to £1 billion.
City council leader Mike Whitby delivered a final plea to the Chancellor to back the project today, saying up to 44,000 new jobs could be created.
But the West Midlands is up against Manchester and Leeds in the contest to become a “city region”, with the power to raise funds for major projects.
The winners will be announced by Mr Darling in the Budget on Wednesday.
If the West Midlands bid is successful, funding would at last become available for the long-awaited extension for the Midlands Metro light rail system.
Local councils, working together under the name Birmingham Coventry and Black Country City Region, have drawn up proposals which would allow them to raise cash themselves instead of depending on handouts from Whitehall.
They want to borrow money in order to fund projects which will benefit the local economy, using the extra business rates they receive once the projects are completed to pay back the loans.
For example, by extending the Black Country Metro from Wednesbury to Brierley Hill and Stourbridge, they would attract new employers into the area, leading to an increase in business rates paid.
But under the present arrangements, local councils simply pay business rates to the Treasury, and cannot use the money on local schemes.
For the West Midlands scheme to go ahead, the councils will need officially to be designated a city region, with new powers over the money they raise. At the moment, they are part of a voluntary arrangement which calls itself a city region but has no formal powers.
Mr Darling has said he will announce the creation of two city regions as part of his Budget announcement, but he is known to be considering at least three rival proposals.
Councillors and business leaders have been pressing the Government to ensure the West Midlands bid is successful. Letters of support from Chambers of Commerce and CBI in the West Midlands have gone to the Chancellor, Lord Mandelson, the Business Secretary, and Hazels Blears, Communities and Local Government Secretary.
Under the West Midlands scheme, a series of “Accelerated Development Zones” would be created in which business rates raised through economic development would be used to fund major projects.
Transport schemes already planned include the Black Country Metro extension, a light rail service from central Birmingham to Birmingham International Airport and M5 improvements.
The region would need to find £1.03 billion to pay for the projects. But councils estimate that as a city region, they could raise £202 million a year from business rates, allowing them to pay back a loan.