The #500 million redevelopment of Birmingham's New Street Station passed an important hurdle yesterday after city councillors recommended the ambitious scheme be given outline planning permission.

Planning committee members unanimously backed the project – a decision described as of historic significance by the city council's director of regeneration.

Clive Dutton said the new station, able to cope with 150 per cent more passengers than the existing cramped 1960s structure, would herald Birmingham's pre-eminence globally.

The completed scheme, with expansive glass atrium and airline-style departure lounge facilities, would provide a "stunning" gateway to the city centre and deliver a huge boost to the Birmingham and regional economy, Mr Dutton added.

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The spirit of unity did not quite extend to the owners of Birmingham's two largest shopping centres, who lodged holding objections.

Warner Estates, owner of the Pallasades, is concerned about the impact of a new atrium, which will force the relocation of up to 50 stores. Although retail space will remain roughly the same, shops may have to be re-sited on land not owned by Warner.

The Birmingham Alliance, owners of the Bullring, object because they fear the realignment of the station will make it more difficult for customers to walk to the Bullring.

Spokesmen for Warner and the Birmingham Alliance said both continued to support the redevelopment in principle, but felt they had to protect their interests by submitting objections. Negotiations are continuing with the council. Mr Dutton, who earlier in the year questioned whether the design possessed the "wow factor", said he was confident changes would be brought forward when the scheme returns to committee for detailed planning permission.

"I am convinced on-going negotiations with Network Rail about the design will lead to a scheme of the quality we expect," Mr Dutton added.

The committee's recommendation to grant outline planning permission will be considered by the Department for Communities and Local Government, although approval is expected to be a formality.

The next crucial date will come in January, when the Department for Transport is expected to make the first of a series of decisions about a #363 million funding package – without which the scheme cannot go ahead.

Building work will begin in January 2009 and be completed by June 2013, if funding is granted.

Martin Chambers, programme director for the New Street project, said: "The planning committee has recognised that these outline plans offer an exciting opportunity for the city and region. We welcome the committee’s close scrutiny and remain committed to working with the planning authority and other local stakeholders to make sure that we deliver a world class passenger experience at New Street.

"We have all seen the level of support from the public, business and across the political divide over the past few weeks. We urge the Government to make an early funding decision to enable us to kick-start this vital project as soon as possible."

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