An announcement today comes after years of campaigning for investment in the network – which was in danger of being closed without millions spent on it.

The decision means the whole length of the track will be upgraded from Fleetwood to Squires Gate and 16 state-of-the-art trams will replace the existing out-of-date fleet.

Council leaders today described it as a "landmark" moment and the investment "crucial" to the resort's ongoing regeneration.

Repairs

The Government will contribute £60.3m to the overall £85.3m cost, with Blackpool Council and Lancashire County Council putting in around £12.5m each.

The Government cash is on top of £11.8m it gave two years ago to fund emergency repairs.

The best heritage trams will be retained under the scheme, but commuters will benefit from a new fast link service.

Transport Minister Tom Harris was making the announcement during a visit to Blackpool today.

He said: "It's certainly a vote of confidence in Blackpool and recognition that this is important to the economy of Blackpool.

"We support light rail in principle but not at any cost and in Blackpool they have come up with a scheme that is affordable, workable and able to create a tremendous boost."

Mr Harris added: "At more than 120 years old, the Blackpool and Fleetwood tramway is part of the local heritage as well as an important part of the local transport system.

See more in today's Gazette