Work could start by the end of this year on reviving Blackpool's tram network.

Just one major hurdle remains in the battle to win £66 million in government funding for the ailing tram system, which could be closed within years without major investment.

But if Department of Transport ministers agree to the North West Regional Assembly's (NWRA) recommendation, the first funds could be available within months.

"We would hope to start this year," said Blackpool Council leader, Cllr Roy Fisher, after a regional assembly meeting on Friday gave Blackpool the thumbs up.

"The funding comes in for 2006/07 and we hope to get some of it this year. It is a massive upgrade and will take some years to complete.

"Obviously we are very pleased the bid has got this far - it is a step in the right direction. We now have to continue to press the government to accept the decision."

Blackpool Council and Lancashire County Council will each contribute £11 million from their own funds to the scheme, which will see a complete replacement of tracks and new rolling stock for the historic line.

Other schemes picked out for funding include the Manchester Metrolink extension and the long-running bid to build a link road between the M6 and Heysham.

Lord Peter Smith chairman of the NWRA executive board, said: "We reached broad consensus on what should be the region's top transport priorities. We had to make tough choices, but we would rather do this ourselves in the region rather than have it done to us by Whitehall.

"Our recommendation is realistic, maximises spend of the money available to us, and avoids the trap of over-commitment which would run the danger of Government being left unsure what our real priorities actually are."

Last Friday's vote is a major early boost for the Blackpool 2006 campaign, launched last week.

The tram network is one of four major campaign issues identified by Blackpool Council, along with two bids for lottery funding and the fight for a casino licence.

Cllr Fisher added: "It is an extremely positive way to start the 2006 campaign. This is what we were endeavouring to achieve and I am very pleased that the campaign is kicking off in such fantastic style."