Birmingham's dream of lifting its image to that of a modern European metropolis with trams running through the city centre moved closer to reality yesterday.

Transport officials and council leaders gave the green light to submit a business case for two schemes to the Government and ask for #322 million in public funding. If approved, a #116 million line will run along a route from Five Ways to Snow Hill Station taking in Corporation Street, New Street Station, Broad Street and the ICC, by 2012.

The plans also include proposals for a Black Country extension from Wednesbury to Brierley Hill via Dudley.

A business case for the project has been approved by the West Midlands Passenger Transport Authority and the transport executive Centro.

Councillor Gary Clarke, Centro-PTA chairman, said setting up the light rail lines was a vital cog in boosting the image of Birmingham and its surrounding region.

"Across Europe, city-regions have transformed themselves with investment in public transport," he said.

"Trams have been making a comeback both as an agent of urban renewal and as the spine of modern and revitalised networks."

Coun Clarke highlighted light rail success stories of other cities, including Strasbourg, Grenoble, Karlsruhe, Dublin, Nottingham and Birmingham's sister city Lyon.

Submission of the plans come after months of dispute within the council, much of it focusing on concerns over new congestion problems created by diverting cars away from the metro route.

The Centro-PTA proposals include earmarking #7.1 million to ease problems caused by traffic.

The Government is expected to give a decision on whether to fund the proposed construction of the 26-mile network in January 2008.