The next few weeks mark a critical stage in the long-running campaign to deliver a step change in the quantity and quality of West Midlands public transport.

As regional Minister Liam Byrne makes clear today, the Government has all but given up on its crude attempt at blackmail, which involved withholding transportation investment unless councils agreed to stage unpopular road pricing experiments. The next question, which Mr Byrne didn't quite answer, is what happens now?

West Midlands local authorities are being invited to come up with three transport priorities, which Mr Byrne will then champion in a bid to obtain Government approval. This raises two rather obvious uncertainties - what are the priori-ties, and how will the chosen projects be paid for?

Income from congestion charging schemes, the Govern-ment's preferred plan, will not be forthcoming. Instead, councils will probably have to raise money through a combination of borrowing and land sales. Reinstatement of borrowing as an approved method of funding major capital projects represents something of a return to the past in the relationship between central and local government, although as Mr Byrne reminds us this was the way that Chamberlain financed the expansion of Birmingham at the end of the 19th century - although, what is borrowed does of course have to be repaid with interest.

Deciding the three priorities is another matter. New Street Station can be ticked off the list, thanks to £400 million of Government funding. Birmingham International Airport's runway extension is in the bag. That leaves the Midland Metro which, in theory, could become a region-wide asset linking Birmingham with other cities and towns.

Uncertainty over the metro extension through Birmingham city centre must be resolved without delay. It is an open secret that the Conservative-led city council is unwilling to have trams running along Corporation Street and Broad Street and that an alternative route from Snow Hill to the Bullring and wholesale markets, and eventually onwards to the NEC and airport, is under consideration. The easing of restrictions on borrowing and the prospect of a hefty cheque from the sale of the markets site could enable a start to be made on the city centre extension.

But after about 20 years of debate, the future of the metro cannot remain forever in limbo. The council has to show the Government why trams are right for Birmingham and the West Midlands.