Peterborough is to be part of a "growth corridor" stretching from London under new government guidelines issued this week.
It makes good sense to include Peterborough, said John Prescott
Deputy Prime Minister John Prescott said the city was to be added to the London-Cambridge-Stansted growth corridor.
"It makes good sense to include Peterborough and the whole of Cambridgeshire in the growth area," he said.
"Peterborough has a history as a very successful growth point and it should have an important role in the growth area proposals as they develop."
On a visit to the city Yvette Cooper, a minister at Office of the Deputy Prime Minister (ODPM) said she had been impressed with the potential for regeneration and growth.
She also remarked on the commitment and dedication of local people to improve Peterborough's position as a thriving regional hub.
The growth area designation means people living in and around Peterborough could, in the future, benefit from
better and more affordable housing as well as the infrastructure to sustain communities.
The ODPM also announced funding for three communities in Suffolk, Bedfordshire and Essex.
Ipswich in Suffolk, Maldon in Essex and Luton in Bedfordshire will benefit from a share of more than £9.5m to improve the state of their parks and public spaces.
"Some great ideas have been put forward by Ipswich, Maldon and Luton authorities," Mr Prescott said.
The ideas ranged from introducing community wardens, to expanding
multi-agency 'environmental action days' and tackling the blight of abandoned vehicles and fly-tipping and revitalising under-used parks.
"I want to see local communities benefiting from the changes these plans will make to their local environment," he said.