Proposals for a children's quarter to be established in Birmingham were yesterday praised by the city council's planning and regeneration boss.

Clive Dutton spoke out as he addressed Birmingham Children's Hospital's annual general meeting, claiming he was keen for it to be at the heart of the new district.

The trust's chief executive, Paul O'Connor first presented the idea to city council bosses in April. The Children's Quarter would bring together educational, health and welfare services as well as social facilities for young people.

"This is a tremendous opportunity to connect with young people and to look at where we're taking this city overall," said Mr Dutton.

"I've welcomed the hospital's initiative to look forward on this matter and its eagerness to bring its vision to fruition for the children of Birmingham and future generations."

He added: "The Children's Hospital is an international centre of excellence and we want play a crucial role, with the hospital, in regenerating this part of the city.

"Despite all the building work that's going on around Birmingham there's no big master-plan for the city overall or even the city centre.

"So unless we can express a common vision over the next couple of generations, we will never get to the position we want until all the relevant stakeholders are marching to the same tune."

The trust's annual report showed it had a £547,000 cash surplus at year end, despite an increase in patient activity.

Between April 1, 2006 and March 31, 2007 surgeons performed 45 liver transplants, 14 kidney transplants and seven small bowel transplants.

The number of outpatients rose by more than 24,000 with many taking advantage of new drop-in slots where formal appointments are not necessary.

Similarly GP referrals to the Children's and Adolescents Mental Health Services (CAMHS) also saw an increase of 2,700 new cases. Last month Mr O'Connor confirmed the hospital's Tier 4 service would retain all ten beds, which campaigners feared would be halved under the trust's Estates Review.

Those beds, currently housed in Ward 3, are to be moved to make way for the first paediatric Wellcome research facility in the UK.