During a visit to Nottingham on Friday 31 July, Sadiq Khan MP (Minister of State for Transport) announced Conditional Approval for the project.

This paves the way for the City Council to begin the process of selecting the companies who will build NET Phase Two and operate the enlarged network. It also demonstrates the commitment and confidence the Government has in the scheme.

Councillor Jane Urquhart (Nottingham City Council's portfolio holder for Transport & Area Working) said: "This is a massive boost for Nottingham. NET Phase Two would be the largest single financial investment by government in the city. This will help steer Nottingham out of a recession by creating jobs and bringing in much needed new investment. Equally important is the fact that even more of our residents and visitors will be able to use a clean, modern and efficient tram to travel in and out of Nottingham."

Today's announcement is yet further proof of how well Nottingham is weathering the current economic climate. The financial backing of NET Phase Two combined with funding guaranteed for other major projects such as Renewal of secondary and special schools, the Meadows PFI bid, the district heating and carbon reduction projects and the Future Jobs Fund, brings to over £1 billion the total Government investment in Nottingham.

The Government today also confirmed the Order for one of the key funding streams for NET Phase Two - the Workplace Parking Levy (WPL).

As well as contributing towards NET Phase Two funding, the WPL will support the £67m redevelopment of Nottingham's railway station (The Hub) and maintain the Link bus network which transports people to and from some of the city's major employers.

However, following discussions with the Government, it has been agreed to delay charging businesses until April 2012 until the economy is healthier. This is very welcome news particularly as the Government will cover the shortfall in revenue so the programme for public transport investment will not be disrupted. It is proposed that businesses will need to be licensed, at no charge, from October 2011.

Cllr Urquhart said: "The fact that we have over two years before the WPL is implemented gives us the opportunity to work with businesses to help them develop more sustainable transport policies, encourage behavioural change and reduce congestion, which has a significant impact on business.

"While we welcome all of today's news, we appreciate that there are some residents who will have concerns about the impact the new tram lines may have on them. We will ensure that all affected residents are communicated with fully throughout the entire process to minimise any further concerns and disruption."