Birmingham City Council will bankroll a major makeover of Edgbaston cricket ground by lending Warwickshire County Cricket Club £20?million.

Cabinet members have agreed a 30-year loan at a five per cent rate of interest.

The offer is subject to WCCC obtaining planning permission for the refurbishment, which will replace existing stands, provide permanent floodlighting, increase spectator capacity to 25,000, and improve hospitality facilities.

Housing development and a hotel are also proposed on a site close to the ground. The scheme, at a total cost of £32million, comes before the council planning committee on Wednesday.

Cricket club officials say the changes are vital if Edgbaston is to retain its Test Match status and appeal as a venue for international floodlit games.

According to a cabinet report, there is no certainty beyond 2011 that Birmingham will retain Test cricket unless Edgbaston is improved.

The report adds: “Edgbaston provides a showcase for English cricket to a growing global audience, in particular the emerging markets in south Asia. Economic impact studies show the current value of major cricket matches hosted at Edgbaston to be worth £12?million a year to the regional economy.

“There is increased competition from new cricketing venues to stage major matches and the club considers it must improve its facilities, including floodlighting.

“Without such improvement and investment, the club states it would be unlikely to meet the requirements of the English Cricket Board for major matches, and so the club, local employment and the wider city economy would suffer from the loss of the most important fixtures.”

The planning application is opposed by scores of people living close to the ground who argue that the proposal represents over-development and that floodlighting would be intrusive.

The opponents have been backed by local MPs Lynne Jones and Roger Godsiff.

Phil MacDonald, operations and development director at WCCC, welcomed the decision to grant funding to the club.

“This funding is critical. To have the city council lend us a significant proportion of that money is extremely important both to us and to Birmingham,” he said. “It is very important that the second city maintains an international cricket venue and this is a step in the right direction.”

Warwickshire claim their proposed redevelopment will create nearly 4,000 jobs and bring more than £12million per year into the local economy through the hosting of Test matches and lucrative day/night limited overs games.