A planning application was approved by councillors on Monday, but Government Office North West dramatically stepped in and put a hold on the process.

Officers at regional level have now examined the documents and withdrawn their Article 14 direction meaning the decision of the council's development control committee will stand.

It was feared a public inquiry could have put the £100m tram upgrade at risk because of timeframe constraints over its funding.

Blackpool Council leader Coun Peter Callow said: "It is now full steam ahead - the trams haven't hit the buffers.

"The depot is going ahead and the future of the tramway in Blackpool has been safeguarded for this and future generations.

"Timing is of the essence and it was important to secure the funding.
"The process will have been seen by the public to have been open and transparent and that's exactly what we wanted."

Local residents have fought a fierce campaign against the plans which they say will be detrimental to the local environment and their own homes.

Starr Gate Residents Association chairman Mark Chapman said: "Obviously we are disappointed with the result.

"But Government Office has not tested the legaility of the documents, they have just decided the application is not of national importance to merit a public inquiry.

"The residents association will be consulting our legal adviser with a view to pursuing the decision through the courts."

Building work on the depot – which will house a fleet of 16 supertrams, a tram wash, and car parking – has continued.

The plans were first approved in June but, in November, a court found the council had not met environmental screening rules and the authority was forced to make a fuller assessment of environmental impact and resubmit the application.

The council has a funding deadline of Easter 2012 from central government and requires the tram depot up and running by May 2011.