Passengers are set to benefit from a bigger and better New Street Gateway after the Government's decision to back plans to transform Birmingham New Street station with almost £400 million of funding.

The scheme, developed by Birmingham City Council, Network Rail, Advantage West Midlands and Centro-WMPTA, will see the current 1960s-built station transformed into a bright, modern 21st century transport hub for the entire region. It will also regenerate large parts of Birmingham city centre and create thousands of jobs.

The total value of the Gateway Plus project is £598 million, including private sector involvement. Building work will begin in 2009 and the project is expected to be finished by the end of 2013.

Reaction from across the West Midlands was universally euphoric. 

* Mike Whitby, leader of Birmingham City Council and chairman of the New Street Gateway steering group: "The West Midlands spoke with one voice and we thank people for backing this important bid for funding. With the support of business, local politicians, and most importantly, the general public, the Government has responded to our call for a better station for Birmingham.

"This is not an overnight job. However, from 2011 passengers and the general public will enjoy the first benefits of this transformation."

* Mick Laverty, Advantage West Midlands: "The New Street Gateway scheme will be a catalyst for major regeneration. The future prosperity of the West Midlands economy will be helped enormously by Birmingham having a station which creates the right first impression."

* Iain Coucher, chief executive, Network Rail: "Network Rail is delighted the Government has given the green light to create a station fit for the passengers of Birmingham, the West Midlands and beyond.

"This is a much needed scheme and is among a raft of projects that Network Rail is looking to take forward to expand and develop Britain's rail network in the years ahead."

* Gary Clarke, chairman of Centro-WMPTA: "Passengers across the region have been calling for something to be done about Birmingham New Street and that's why we made it a priority. "Today's announcement is great news and we are proud to play our part in creating a Gateway to the Midlands that passengers can be proud of."

* Dr Sarindar Singh Sahota, West Midlands Business Council Deputy Chairman: "At last, the Government has made the right decision. This news will help make Birmingham and the West Midlands an attractive area for inward investment, business growth - and new jobs.

"With much of the work planned to be completed by 2012, it will also help the Midlands cash-in on an expected increase in the number of tourists caused by the Olympics."

* Mike Cherry, West Midlands Federation of Small Businesses: "This is excellent news for Birmingham and the West Midlands. For too long we have seen all the capital investment being poured into other areas and it can only restore confidence that, provided plans are robust, then the money will be available.

"Small businesses in particular will welcome this, as the first step to sorting out the infrastructure problems here across the West Midlands. The hard work and effort put in by all those involved must be roundly applauded."

* Jerry Blackett, Birmingham Chamber of Commerce and Industry chief executive: "We are delighted with the announcement of a total funding of £388 million from the Government.

"This provides the city with a great opportunity and the business community as a whole looks forwards to working with Birmingham City Council to turn this exciting prospect into reality. We now face the challenge of completing the funding through business investment recreating the sort of public/private vision that created the NEC in Birmingham.

"Today's announcement marks the end of the beginning for a long-awaited project. New Street is a major strategic rail junction for the whole of the country and we expect the scheme will create a national showpiece in the heart of the city."

* Peter O'Grady, strategic development manager at the Engineering Employers Federation: "Today's long overdue announcement of funding for the redevelopment of Birmingham New Street is great news. The station is a main gateway to our region and this money will at last mean that Birmingham can have a station fitting for a major European city.

"Along with expansion of Birmingham International Airport, we can at last have the transport infrastructure this region so desperately needs to attract business and tourism."

* Len Threadgold, Institution of Civil Engineers West Midlands chairman: "The New Street transformation is expected to create many new jobs in the civil engineering sector and provide a massive boost to the transport infrastructure of the West Midlands.

"However, a more co-ordinated approach to national infrastructure planning would enable much-needed investment to take place sooner, and avoid the drawn-out process New Street has had to undergo. A recent national ICE report on capacity and skills highlighted how uncoordinated planning of infrastructure projects discourages industry investment in civil engineering capacity and skills. The report called for an independent commission to take a strategic overview of all major infrastructure projects and to coordinate their delivery.

"Perhaps if we had such a body in place construction would already be under way at New Street, and it would allow other crucial transport projects, such as Midland Metro extensions and motorway improvements, to get started with minimal delay."

* Phil Davis, TravelWatch West Midlands spokesman: "Passengers will want to see close consultation on the planning of passenger facilities at the new station. We must avoid repeating the 1960s mistake of building a not-very-good shopping centre, with a railway under it almost as an afterthought. As for more space for actual extra trains - that's phase two."

* Freddie Gick, Birmingham Civic Society chairman: "We must be brave in accepting a design that will become symbolic of the innovative, creative city we are. Like it or not, the Selfridges building has begun to awaken a new image. Now, the Gateway has the potential to become the major landmark people everywhere associate with us. So, out of the ashes of the current station, let the phoenix emerge to become the gateway to the most progressive city in the country. "

* Neil Maybury, Birmingham Business Focus chairman: "The business community has had New Street Station at the top of its agenda for years, not only as the station at the nation's rail crossroads but also as the single most important traffic infrastructure project for the benefit of the citizens of Birmingham. We have proved to ourselves what we can do when we really put our minds to it."