The Government may take at least another two months before deciding whether to approve the final tranches of funding for the £550 million redevelopment of New Street Station, it emerged last night.

West Midlands Minister Liam Byrne said he expected confirmation from the Department for Transport and the Department for Business, Enterprise and Regulatory Reform by April.

But the deal would ultimately have to be sanctioned by the Treasury because so much public money was involved, Mr Byrne said.

It is 114 days since the New Street Gateway partners - Birmingham City Council, Network Rail and Advantage West Midlands - lodged the final business plans for the new station with the DfT, after being asked by ministers to prove that lower cost options had been properly examined.

Since then, the DfT has demanded assurances over who would pick up the bill if costs over-run.

Mr Byrne said he was satisfied the bid was in "the best possible shape" and it was now a matter of waiting for approval following a final review by the Transport Secretary.

He added: "Ministers will be looking at this hard over the next couple of months.

"The bid is in excellent shape because the region as a whole has got behind it. Everyone in the West Midlands is ambitious to get the deal sorted out as fast as possible.

"The conversations I have had with the DfT last week confirmed to me that Birmingham and its partners have now completed everything that they needed to get done. I am confident the bid is in better shape than it has ever been."

Mr Byrne was certain there would be a new station, but he stopped short of saying whether he thought the Gateway partnership would get all of the Government cash requested.

The Department for Transport confirmed £128 million toward the project last summer, which would enable basic improvements to the platforms to take place. A further £260 million is required from the two Government departments in order to double the size of the passenger concourses and provide airport-style waiting areas and a new shopping centre.

Mr Byrne admitted: "You can never second guess the Secretary of State's review, and the deal ultimately has to be signed off by the Treasury because it is so big.

"But as the regional Minister, I always said this is my number one priority."