Britain's "core cities" such as Birmingham must take the lead in developing regional economies, according to Deputy Prime Minister John Prescott.
Mr Prescott yesterday confirmed his commitment to regional government, attacking the Conservatives for their opposition to elected regional bodies.
In a major speech, in the run-up to next month's local elections, he also praised Birmingham for transforming the city centre and making innovative use of the city's canal network.
Mr Prescott is the Cabinet Minister responsible for local government and his department is considering radical reforms to the way towns and cities are run.
These could include the creation of "city regions" led by major cities such as Birmingham, with the power to levy their own taxes, and the election of regional mayors.
But the proposals are controversial, particularly as Coventry and Wolverhampton are expected to be included in the Birmingham city region.
One Labour MP, John Spellar (Lab Warley), has called on Mr Prescott's department to acknowledge that the Black Country is not part of Birmingham.
Conservatives are strongly opposed to the concept of regional government, saying it will create another tier of bureaucracy.
Mr Prescott will publish his proposals in a Government White Paper in the summer.
Speaking to party activists in Derby, he said: "We have always recognised that economic development requires a strategic regional dimension."
In a dig at Conservative leader David Cameron, he said: "The Tories might attack regional structures now, like Cameron did last week. But they set up Government Offices for every region.
"The difference is they don't want any democratic accountability to the decisions taken at a regional level."
Mr Prescott said: "It's in every region of the country, with our major, 'core cities' leading the way." These are Birmingham, Nottingham, Newcastle, Sheffield, Bristol, Leeds, Liverpool and Manchester.
Mr Prescott added: "Birmingham has been transformed. It used to be Motorway City. Now it's reclaiming its streets for its people.
"And it's put the heart back into its city centre with Brindleyplace and the innovative use of the old canal system."
But he was criticised by M idland MP Caroline Spelman, the Conservative shadow Cabinet member for Local Government.
She said: "There is no public appetite for regional structures. It wouldn't work to have Coventry and Wolverhampton in one city region with Birmingham.
"Would the people of Coventry be happy to be governed by Birmingham? Labour are obsessed by these city regions, which people feel no allegiance to. Local authorities in the West Midlands already work together extremely well. What is important is co-operation between the different authorities, not the creation of a whole new bureaucracy."