This follows the Government pledging £244m towards the £382m total cost of the scheme.

The extensions will go from the city centre to Oldham, Rochdale, and Chorlton as new track and new stops are created. Work will also include upgrades such as rejuvenating disused rail routes for the trams to run on. This will in turn contribute to faster journey times and more frequent services.

Work is expected to complete by 2012.

Ruth Kelly said:
"Metrolink has been at the heart of Greater Manchester's transport system for more than a decade. Carrying 20 million passengers a year, it has been providing an excellent service to local residents and commuters.

"These much-anticipated improvements will make a huge difference to local public transport, and are expected to carry an extra 10 million passengers a year.”

Greater Manchester Passenger Transport Executive (GMPTE) is also constructing a further extension to the Metrolink network, separately funded, to Droylsden in the east of the city.