There is growing optimism that a White Paper this summer will begin the process of awarding Birmingham and the West Midlands city-region status - handing wide-ranging economic development powers to local authorities.

Council leaders, officials from public agencies and business representatives held talks with Local Government Minister David Miliband on Thursday, and came away convinced that the city-region initiative has a high priority at Westminster.

Changes under consideration would see the seven West Midlands metropolitan councils and Telford & Wrekin Council handed new powers to run transportation, housing, skills and economic development.

The city-region, run by an executive committee of councillors and business representatives, could have an annual budget of #750 million and enjoy limited tax-raising powers.

It would undertake work presently carried out by Advantage West Midlands and the Learning and Skills Council.

Simon Murphy, who has been appointed city-region project manager, said Mr Miliband appeared to be "very much engaged" with the idea.

Mr Murphy said there was no doubt that the executive powers enjoyed by European and American cities gave them an advantage in pushing forward economic development.

He added: "Working together we believe we can increase the competitiveness of our region. We can make the case to the Government for more powers, both now and later on."

The challenge was to convince the Government of the need to give the West Midlands a level playing field by awarding the region's councils powers similar to those enjoyed in Wales, Scotland and London, he added.

Ted Richards, the leader of Solihull Council and chairman of the West Midlands Metropolitan Joint Committee, said: "We are making a very strong case to Government that we believe will bring real benefits to local people - more jobs, prosperity, better transport and better housing."

Mike Whitby, the leader of Birmingham City Council, said: "I have met with city leaders across the world - in China, the USA and in Europe. It is clear from my discussions with them that, to achieve our full potential, this city-region must be given greater freedom locally."

Ian Squires, the managing director of ITV Central, who was at the meeting with Mr Miliband, said: "It is overdue for business to be back at the heart of regenerating our cities.

"We can ensure the new local powers are used to maximise the productivity and creativity of our businesses to deliver exceptional economic growth with locked-in efficiencies."