The announcement that Birmingham is finally to get funding for the refurbishment of New Street Station - and all of the money asked for, at that - would appear to be total vindication of the high-stakes poker game played by city council leader Mike Whitby over the past three-and-a-half years.

When Coun Whitby took control of the council in June 2004 he inherited a New Street plan of sorts. But it was nothing like today's £550 million Gateway scheme, incorporating airport-style waiting areas, extended platforms and a new shopping centre. Nor was there any obvious answer to how the scheme would be funded.

The plan as it stood simply wasn't good enough for Birmingham and did not reflect the city's ambition to be a major player on the world stage.

Coun Whitby and his Conservative-Liberal Democrat coalition tore up the plans and set about redesigning the new New Street. By the summer of 2005, sorely needing success in a big transportation project, having been ridiculed for his abortive Birmingham under-ground railway scheme, Coun Whitby declared that he would stake his personal reputation on securing a fully funded New Street Gateway.

There were plenty of critics over the next three years who were prepared to bet that the partnership between the council, Network Rail and Advantage West Midlands had bitten off rather more than it could chew.

The first problem, which has not been solved even today, was that the refurbished New Street would not have any capacity for additional trains. The refurbished station would be able to cope with twice as many passengers in sweeping new airport-style concourses, but the old problem of bottlenecks on the tracks entering and leaving the station would remain in place until the Government agreed to provide additional tracks between Coventry and Wolverhampton on the West Coast Main Line.

In other words, while Birmingham might get a sparkling new station passengers would still face delays on the trains. They would, though, be able to while their time away in the new-look shopping complex on top of the station.

This raised an immediate issue. Would Government money be better spent on building the so-called Grand Central Station at Eastside. This would enable all of the track capacity problems to be solved, but might leave New Street as little more than a city centre branch line. It was an argument that would return time and again to haunt the New Street project.

Coun Whitby persisted, describing New Street Gateway as much more than a railway station.

His message was threefold. Firstly, New Street is a major strategic rail junction at the heart of services from London to the North West and from the North East to the South West. Secondly, a city the size of Birmingham demands "wow factor" gateways to give visitors a memorable experience. Thirdly, the realignment of New Street Station would enable the council to create new pedestrian links between the Bullring and Mailbox shopping centres, while opening up a shabby part of the city centre for redevelopment.

The triple whammy, the council reasoned, meant that Birmingham could lever in funding from the private sector, the Department for Transport and the Department for Trade and Industry.

But the wheels almost fell off in the summer of 2007 when Ministers began to brief journalists about the council's apparently sloppy business plan. Alternative lower cost proposals for Gateway had not been properly considered, it was stated by Transport Minister Tom Harris.

There were also warnings that the £200 million private sector contribution was not enough.

The suspicion was clear enough. A classic Government cost-cutting exercise was under way. After all, no one gets all of the money they ask for when planning major capital projects.

Six months of eyeball to eyeball meetings followed, chaired by the new West Midlands Minister Liam Byrne, who said he would make the delivery of New Street his number one priority. Rumours were widespread, culminating in Government claims at the beginning of this year that the project was being held up because the council could not agree who would foot the bill if costs over-ran.

Throughout all of this, Mr Byrne insisted that the business case was now in better shape than ever before and it was simply a case of waiting for final Ministerial approval.

Few people really believed him and the doubters had a field day a week or so ago when Mr Byrne included in copies of a speech handed to journalists a prediction that New Street funding was a matter of days away - only to omit the section when he actually delivered the speech.

Now that the long struggle is over even Coun Whitby's enemies, and there are plenty of those, must surely agree that this was one occasion when it was necessary to play hard-ball. Or, as Coun Whitby himself said, "someone is going to blink first and it's not going top be me".

The refurbished New Street, the design of which is out to competition, will provide a once in a lifetime chance to transform a run-down part of Birmingham city centre. It is the type of bold redevelopment on the grand scale envisaged by Professor Michael Parkinson in his scoping study for the city centre masterplan.

Transportation issues don't end there, of course.

Coun Whitby's great challenge now is to deliver the Metro tram extension through the city centre.

If he can persuade the Government to build New Street, who can say that the Metro isn't just around the corner as well?