The expansion of the Midland Metro would create up to 5,300 new jobs and boost the region’s economy by an extra £178 million a year, according to council leaders.

But the Metro has remained £253 million short of the funding needed to complete it, with little prospect of the money being found.

Today, the plan for the City Region emerged as the best chance for the Metro extension, together with a wish list of other major transport infrastructure projects, to become reality.

So far, the Government has refused the cash.

Metro extensions from Birmingham Snow Hill to Five Ways via Corporation Street, New Street Station and Broad Street as well as the Wednesbury to Brierley Hill via Dudley town centre line are ready for implementation, according to Centro.

Despite securing £36 million from Merry Hill shopping centre owner Westfield and developer Ballymore, funding packages for the projects have yet to be agreed by Government because the councils of the West Midlands unanimously rejected a trial congestion charging scheme which could have raised the revenue locally..

Work has already begun to purchase land compulsorily along the route at a cost of £12 million. The first piece of land is 24,111 sq ft in Park Lane East, Tipton, a disused builders’ yard which could become a car park for Metro users and Dudley Port rail station.

Delays to the project mean Centro would lose its right to compulsorily buy land by 2010 if it did not start to use its powers, granted in 2005.

A second phase costing £30 million would see trams go further into Wolverhampton from their current terminus at St George’s.

Centro spokeswoman Babs Coombes said: “Metro is a regional priority and we will be submitting a business case for the funding.

“We are making this announcement to inform manufacturers that we could soon be in the market for new trams.”

The Treasury has said at least two areas could become city regions in April.

If the scheme gets the go-ahead, the West Midlands councils could then discuss their formal proposals for the accelerated development zones with the Treasury in the summer.

Any expansion of the Metro would also unlock further investment from the Midland Metro.

Around £45 million extra would be spent on 25 new, longer trams.

West Midlands transport authority Centro has said the new trams are needed in order to provide 10 trams an hour off peak and to increase the capacity of carriages at peak times from 158 to 220.

Currently six trams an hour run between Wolverhampton St George’s and Birmingham Snow Hill off-peak, rising to 10 during rush hours.

Centro intends to have the new trams by 2014, but will not be able to ask manufacturers to bid for the work until it has confirmed it can build a new seven-mile Metro line from Wednesbury to Brierley Hill.

There are also plans to extend the Metro through Birmingham city centre from Snow Hill at a further cost of £70 million.