Transport Secretary Geoff Hoon made a surprise visit to Manchester to announce a £1.4bn transport package to replace the Transport Innovation Fund plans which were killed off by last year’s congestion charge ‘no’ vote.

It will mean that all but one of the stalled Metrolink extensions – to Chorlton, Manchester Airport and Rochdale and Oldham town centres – will now go ahead. Only the line through Trafford Park will remain on the drawing board.

Other winners include:

Stockport’s long-awaited SEMMS relief road, linking the airport and the A6; a redesigned version of the Mottram by-pass; a guided busway between Leigh and Manchester; a Wigan inner-relief road; park and ride across Greater Manchester; and more frequent bus routes in the city centre.

The package, which could create 21,000 jobs, will be financed by borrowing against small increases in council tax – Greater Manchester Integrated Transport Authority’s levy will go up by 3% for the next six years, raising council tax by about £2 a year – and the Government bringing forward the regional fund allocation.

And Greater Manchester’s 10 councils have agreed to hand over 40% of Government money they receive individually for transport.

Manchester Airport will contribute to the costs of building the line there and revenue from Metrolink operations will also be used.

The Government will provide around £165M for the Stockport bypass. A spokesperson for Stockport Metropolitan Borough Council said: ‘The scheme will boost Stockport’s economy, ease traffic congestion, help businesses and residents, and improve access to the airport – it’s good news all round.’

Hoon said: ‘I welcome these proposals to bring forward £195M of Government funding to improve local transport in Greater Manchester.’

Lord Peter Smith, leader of the Association of Greater Manchester Authorities which brokered the deal, said: ‘We have agreed unanimously a priority programme of public transport and highway schemes with funding from national, regional and local sources which will deliver not only £1.5bn of transport improvements, but will also generate the maximum impact on the economy.

The package will also generate social inclusion and environmental benefits.’