Calls for a West Midlands "senate" with the power to impose taxes and responsibility for housing and transport have been backed by the leader of the City Council.
A think tank has urged the Government to create "city regions" to help cities such as Birmingham compete with London and the leading cities on the Continent.
A report by senior local government officials, including Lin Homer, former chief executive of Birmingham Council, warned British cities were poorer than their European competitors, with a lower standard of education and less political influence.
It said Birmingham and the Black Country councils should form an official city region to take control of economic development and planning, and to raise money for improvements to transport.
Similar bodies could be created in Manchester and Liverpool, the report says.
Councillor Mike Whitby, the Conservative leader of Birmingham City Council, said: "I very much welcome the publication of this report, which strongly endorses the approach we are developing here in the West Midlands.
"We have a strong city region partnership currently based upon Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton. The partnership's underlying principle is that we will all work together for the benefit of our city region as a whole, and that all parts of the city region must benefit from our work.
"Together, we are developing an ambitious economic and population growth strategy for our city region to ensure that we can compete effectively in the global economy.
"We shall be discussing this strategy with the Government in the New Year, together with our proposals for providing strong city region leadership."
Local Government Minister David Miliband has already been in discussions with the council about its plans for economic growth.
The report was published by the New Local Government Network. Other authors included the leaders of Manchester and Liverpool city councils, and the chief executive of Sheffield City Council.
It said: "These city regions could be led by an executive committee of leaders drawn from local authorities determined by lifestyle and demographic patterns.
"Forming a 'senate of leaders', this body would offer strategic overview and policymaking power over a range of functions . . . relating to democratic reflection of contemporary lifestyles and economic development."