Two new Midland Metro tram routes in Birmingham and the Black Country could create up to 5,300 new jobs and boost the region's economy by an extra £178 million a year, a new study has found.

The proposed routes - from Snow Hill through Birmingham city centre to Five Ways, and from Wednesbury to Brierley Hill - would bring significant and lasting economic benefits, according to the Centre for Economic and Business Research.

Research by the CEBR, a respected independent thinktank, has been released by passenger transport authority Centro in an effort to put pressure on the Government to approve £300 million funding for the metro extensions.

Ministers are expected to make a decision later this year, but have already said they want to see new routes linked to a package of road pricing and congestion charging across the West Midlands.

The CEBR study found even greater economic benefits could be achieved if Centro's longer term Phase 2 extensions were realised.

These involve three new tram lines radiating out of Birmingham city centre to Birmingham International Airport and the NEC, Quinton and Great Barr and a Black Country route linking Wolverhampton, Wednesfield, Willenhall, Walsall and Wednesbury.

The Phase 2 routes are key to tackling congestion, promoting economic growth along those corridors and in securing the continuing sustainable expansion of the city centre business and retail sectors, according to Centro.

If all of the second phase routes were built, a further 9,000 new jobs would be created with an additional £330 million boost to the regional economy, the study found.

Centro chairman Gary Clarke said: "The findings of the CEBR study show just how strong the business case is for these metro extensions and how quickly they can pay for themselves.

"Whilst it has always been accepted that jobs would be created during the construction phase of such a major transport project, this study confirms how the benefits of improved connectivity and access brought about by the metro extensions will feed their way into the local economy after opening.

"It shows how the metro can act as a catalyst for economic growth.

"Our plans for the Phase One extensions are complete and we are ready to move forward as soon as funding is made available."

Coun Clarke said the economic potential of the Birmingham and Black Country extensions was being increasingly recognised by the business community.

Westfield, owners of the Merry Hill shopping complex, which would be served by the Wednesbury to Brierley Hill extension, has pledged £36.5 million towards the construction costs.

Ballymore, who are building a new office and hotel complex at Snow Hill, have included a viaduct to carry the proposed city centre metro extension. The developers of Arena Central and the V Building, off Suffolk Street Queensway in Birmingham city centre, have agreed to pay £5 million towards the cost of routing the metro along Broad Street.

Coun Clarke (Con Walsall) said the existing metro line, from Snow Hill to Wolverhampton, which opened in 1999, had taken an estimated 1.2 million car journeys off the road with 15 per cent of passengers using the tram instead of their cars for the same journey.

Angus Adams, lead member for Metro on Centro, said: "What this study shows is that the metro also has major economic benefits by providing the links people need between their homes and where the jobs are."