Plans for a powerful West Midlands "city region" are still on track, the Minister in charge of local government insisted.
Phil Woolas said the Government would reveal this summer what extra powers and money it was prepared to grant Midland authorities.
And he insisted Gordon Brown, the Chancellor, who is expected to become the next Labour leader, was fully behind the policy.
A partnership of eight Midland authorities have drawn up plans for a Birmingham, Coventry and the Black Country City Region, which could take responsibility for transport, housing and planning. But last month a House of Commons inquiry concluded plans to create powerful city regions were on the verge of collapse because the Government couldn't decide what it wanted to do.
Speaking to The Birmingham Post, Mr Woolas said: "My message to the cities is, just because it has gone quiet in Whitehall doesn't mean it has gone off the agenda."
The Government would reply to councils in the summer, and details of the funding arrangements would be published in the Comprehensive Spending Review in October, he said.
He added: "There is a huge push, coming from Gordon Brown predominantly, for the idea that councils should have greater powers and responsibilities for the local economic performance."
In the same interview, Mr Woolas urged Labour colleagues to unite behind the Chancellor now that David Miliband, the Environment Secretary, had made it clear he will not stand for the Labour leadership.
The Minister criticised what he called "uberBlairites, an apparent reference to senior Labour figures such as Charles Clarke, the former Home Secretary, who have been encouraging Mr Miliband to stand.
He said: "The most important thing that Tony Blair said in May 1997 was to make the statement that the Government are the servants, not the masters.
"If we ever forget that we are the servants, that is when the electorate will get rid of us.
"The danger of the uberBlairites is that they have forgotten that the public are the masters.
"You cannot choose a Prime Minister of a country on the basis of conspiracies in rooms in Westminster.
"And if you do, the electorate will publish you. Because the electorate will decide, and that's quite right. So this plotting that's going on is damaging my party."
Mr Woolas also had harsh words for councils in Greater Manchester which have withdrawn support for plans to pilot congestion charging in the north west.
Rochdale, Trafford and Stockport have announced they no longer back the proposal. The remaining seven Greater Manchester authorities want to press ahead.
But Mr Woolas accused the three rebel authorities of "playing politics" and said road charging could not happen unless there was a councils agreement.
Greater Manchester and the West Midlands are the two major conurbations competing to pilot road-charging proposals.