The government has dealt Manchester's Metrolink plans a setback by confirming it will not provide the money needed to build three new lines.
£520m will be available for transport improvements
The Secretary of State for Transport, Alistair Darling, said on Thursday that he "cannot" provide the £900m needed to complete the project.
However, £520m will be made available for transport improvements that could include Metrolink, he said.
Bids for additional funds may be put to the new Transport Innovation Fund.
The £520m is dependant on Greater Manchester Public Transport Executive (GMPTE) developing a satisfactory plan to fund the rest of the project.
Another £400m needed
Mr Darling's announcement means the project to extend tramlines to Oldham, Rochdale, Ashton Under Lyne and Manchester Airport may now be realised if another £400m can be raised.
He said: "It is now up to the Manchester authorities to make the most of this opportunity, and to come forward with proposals that will deliver the transport improvements that these areas need".
The government pulled the plug on Metrolink's third phase of development in July, blaming escalating costs.
Metrolink issued a joint statement on behalf of Lord Peter Smith, Leader of Association of Greater Manchester Authorities
(AGMA); Councillor Richard Leese, Vice Chair of AGMA and leader of Manchester City Council and Councillor Roger Jones, Chair of Greater Manchester Passenger Transport Authority (GMPTA).
The statement said: "We are studying closely today's statement by the Secretary of State for Transport to the House, and are also seeking clarification from our MPs who met with the Secretary of State earlier today. We will be issuing a full statement in due course."