Business leaders from around the region have universally welcomed yesterday's decision by the Government to pledge almost £400 million to the redevelopment of New Street Station.

The much-anticipated project is expected to generate around £1.7 billion for the region's economy and create 5,000 new jobs.

However, business agencies have said that statistics alone cannot do full justice to the benefits the redeveloped terminus is expected to deliver.

Jerry Blackett, chief executive of the Birmingham Chamber of Commerce and Industry, said the new station would transform Birmingham's aspirations and make it a true European city.

"It is very clear this was a hard-nosed business decision on the part of the Government and it has not just looked at the improvements the redevelopment will mean to Birmingham but at the benefits it will bring to the country as a whole," he said, adding that the station's strategic location at the heart of the transport network meant it was never a decision that could be made in isolation.

"The decision sends out a message to the rest of the UK and beyond that Birmingham is a city fit for purpose and I believe that the new station will be a real talisman for the region," he said.

The decision will also stop Birmingham from being a laughing stock for having such a poor facility, added Mr Blackett.

"The rest of the country have laughed at us for too long - this decision puts an end to that and means that people in Birmingham will once again be able to take pride in their transport facilities," he said.

The challenge now, said Mr Blackett, was to put together a partnership which could complete the project by providing an additional £200 million of funding.

"We need to recreate the sort of public/private vision that created the NEC.

"However, even with a slowing of the economy, I do not foresee any problems with this because there is such widespread support for the project," he said.

Mick Laverty, chief executive-designate of regional development agency Advantage West Midlands, which is contributing £100 million to the project, said the redevelopment would act as a major catalyst for regeneration.

"Furthermore, the future prosperity of the West Midlands economy will be helped enormously by Birmingham having a station which creates the right first impression," he said.

"We know how important this project is to the region - that's why we've made the single biggest investment in a regeneration scheme by any regional development agency in the country.

"We will now be working with our partners at Birmingham City Council, Network Rail and Centro-WMPTA to deliver a world class station for a world class region," he added.

Employers association EEF West Midlands has also hailed the decision as good news for Birmingham.

"The station is the main gateway to our region," said strategic development manager Peter O'Grady.

"This money will at last mean that Birmingham can have a station fitting for a major European city."

"Along with expansion of Birmingham International Airport, we can at last have the transport infrastructure this region so desperately needs to attract business and tourism," he added.

With the new development currently taking place in the city, property companies have been amongst the loudest campaigners for improvement, citing the added value it will bring to the city.

Dandara, developer of the £150 million V Building, the crowning glory of the Arena Central project, has been a long-time advocate, while smaller companies also have a vested interest.

Serviced apartment provider LMM has already snapped up land in Station Street and is planning a block of 50 new apartments for the visitors to the city expected to flood in once the new gateway is complete.