Council leaders in the West Midlands want more power. Local Government Woolas told Political Editor Jonathan Walker they can have it - if they accept the need for new forms of leadership, such as an elected mayor...
Birmingham is failing to fulfil its potential and the whole UK economy suffers as a result, according to Phil Woolas.
His solution is to offer the city, and its neighbours, what they have been demanding for some time - far more control over their own affairs.
The Local Government Minister said central government was willing to give up more power than most people realised.
But there's a catch.
If the Government is going to hand over control of "billions of pounds", it wants assurances that cities and their regions had strong and accountable leadership.
Ministers also believe this leadership might need to stretch across local government boundaries.
So the West Midlands might need a single, well-known figure to represent Solihull, Dudley, Wolverhampton and other councils, as well as Birmingham.
Speaking to The Birmingham Post, Mr Woolas said this probably meant a directly-elected mayor - a proposal existing council leaders firmly oppose.
But he was willing to consider other options if they could come up with something better, he said.
"We want this to be something that comes from the bottom up, but we want them to consider this question - if we want more powers over the money spent in our area then we are going to have to show that we have strong and visible leadership.
"There have been 12 mayors in England and we feel the experience of these mayors is good.
"We are very much pushing them to consider the idea of an elected mayor or elected mayors.
"If they can't come up with proposals which are convincing . . . we are talking about billions of pounds here."
He added: "We don't have to have a directly elected leadership to have strong leadership.
"But the evidence from Europe and the US is that there is a connection.
"Our point is that if we are going to have an increase in financial powers, the person who is in charge has to be accountable."
If that person was not a mayor then it had to be "some other form of public figure," he said.
"If you live in Birmingham, how do you hold the leader of Birmingham City Council to account? He is elected from one ward. One way of making him accountable would be to have direct elections."
But the Government was willing to consider other options, he said .
Possibilities might include a West Midlands leader elected by councillors across the region, instead of the public as a whole.
"We are asking Birmingham, Manchester, Nottingham and so on to come up with suggestions for how they can provide strong leadership."
Eight West Midland councils have drawn up proposals for a city region in the West Midlands with significant powers -- but they are against a mayor.
Instead, Coventry, Dudley, Sandwell, Solihull, Walsall, Wolverhampton, Birmingham and Telford want to create an executive board which includes the existing council leaders.
They would share out responsibility for policy areas. So the leader of Birmingham Council might become the West Midlands executive member responsible for transport, for example, while the leader of Wolverhampton Council might be responsible for education.
There would also be a chair of the executive, who would be the public face of the region.
So does this meet the Government's criteria? Mr Woolas is not convinced.
He said: "My personal opinion is they would need to toughen that up and show how there was accountability in that."
But he admitted that there were problems with trying to create a single leader for the West Midlands.
"We have particular circumstances in Birmingham because we are very conscious that the Black Country is very protective of their own economy and identity."
Former Local Government Minister David Miliband named Birmingham as a city that was failing to fulfil its potential, earlier this year. Did Mr Woolas agree?
He said: "I do agree with that. I think Birmingham's progress has been superb and radical but it isn't in the European Champion's League - and the UK needs it to be."
Was this down to a failure of leadership?
"You are asking me to criticise [Birmingham council leader] Mike Whitby, and I don't think it is his fault.
"But there is an issue there with the structure of local government. Birmingham is a different kettle of fish to everywhere else.
"It has a budget of one billion and a population of one million. It has huge council wards."
The Government was looking to Birmingham to lead the way on devolution, he said.
"Birmingham's business case is clearly going to be hugely important.
"The city centre is brilliant. You have Aston Science Park, the new Bullring, many great successes there."
But the surrounding area was far less successful, he said.
"The doughnut area is not good enough."
Birmingham was receiving more money from funds aimed at run-down and deprived areas than anywhere else, he pointed out.
But what about the concerns of Birmingham's neighbours, not least in the Black Country, that devolving power to a local level would mean Birmingham dominated its neighbours?
"I don't accept that argument. Wolverhampton's economy is doing very well. It is one of the strongest in the country.
"I know some people might ask us why we should change anything in that case.
"Our proposal is that neighbouring cities and towns can benefit from each other's growth.
Black Country MPs at Westminster had raised concerns with him, including Warley MP John Spellar (Lab), he said.
"The Black Country and Birmingham, as John Spellar is always reminding me, are separate.
"But there is a mutual benefit there."
There could also be more than one mayor in the region, he said, in the same way that London has an overall mayor, Ken Livingstone, as well as mayors in London boroughs such as Hackney and Lewisham.
A recent Government report had warned that British cities were not succeeding in the same way as their rivals in Europe, he said.
"We want local authorities to step up to the mark. We need the cities to drive the economy.
"As David Miliband said, not enough are in the 'Champion's League'. We have a few. Manchester is one of the leaders, along with London.
"We have three cities in the top 50 in Europe. That has got to change. It is an economic imperative."
The Government was talking to cities such as Birmingham about the powers they wanted, he said.
"We will be saying to all the cities - but obviously the core cities are the main ones - if you want more powers, where is the leadership? Where is the accountability?"
He added: "The difference is this - is your council leader the leader of the council? Or the leader of the city?
"With Ken Livingstone, there is no doubt. He is the leader of London.
The White Paper would propose a major relocation of powers from Whitehall to local councils, the Minister promised.
"It is going to be much more radical than the debate at the moment realises. I don't think most council leaders realise how radical we will be.
"We are not talking about strong leadership for nothing."