The Dishforth to Barton scheme, in North Yorkshire, will upgrade 24 miles of the A1 dual carriageway to three-lane motorway standard.

Ruth Kelly said:

"The A1 is a vital route for the North East. The improvement I'm announcing today will for the first time provide drivers with a seamless motorway link all the way from Newcastle to London.

"This scheme will relieve congestion, improve safety and accessibility and make journey times more predictable and reliable - providing a boost for the region's economy as well as benefiting local residents."

The scheme will be delivered in two phases. Construction of the southern section from Dishforth to Leeming will commence in late autumn 2008 with construction on the northern section expected to follow in 2011.