Wolverhampton’s long-delayed bus-train interchange is to go ahead two years earlier than expected following a surprise cash injection of more than £10 million from the Government.

Transport Secretary Geoff Hoon has agreed in principle to provide a £9.83 million loan to allow the developers to start work later this year.

The project will involve with the rebuilding of the bus and train stations, giving visitors a fresh impression of the city and hopefully boosting business.

In addition, Mr Hoon is offering a £2.5 million grant to improve the infrastructure in the project, which will also see links to the Midland Metro improved and a new pedestrian walkway created.

There had been concerns the scheme would not be viable for at least another two years because of the economic downturn and council leader Neville Patten said today it was “stupendous” news for the people of Wolverhampton. Critics had complained that both the local authority and Centro had been dragging their feet over the development. Wolverhampton South West MP Rob Marris invited Mr Hoon to the city last month so he could see for himself what was required.

The Transport Secretary has now written to the Labour MP telling him he is not only prepared to offer a loan but also provide an additional Government grant.

Mr Marris said: “I am delighted to say that Mr Hoon has authorised in principle additional funding. Building work can now start in October.”