Edinburgh's first new tram line in almost 50 years should be up and running by 2009, it has been announced.
Other UK cities have already brought in tram systems
The Scottish Executive has proposed a multi-million pound funding package for the city.
The money should secure a North Edinburgh loop which will link the centre with Leith, Newhaven and the waterfront area.
The service is part of a package of measures aimed at easing traffic congestion in the capital.
The executive said the £375m investment was not dependent on congestion charging being introduced in the capital
The last trams to ply their way through the city went out of service in 1956.
As soon as the final plan has been approved, work can begin on the route without further delay
However, they are increasingly being considered as an efficient and environmentally-friendly public transport option as cities around the UK try to cope with increased traffic.
Three tram routes are planned for Edinburgh.
The executive said that the funding announced on Tuesday would secure at least the completion of the North Edinburgh loop by 2009.
It is also hoped to create a second route linking the Haymarket area with Edinburgh Airport.
Transport Minister Iain Gray said: "One of our top transport priorities is to support a first class transport infrastructure for Scotland's capital and today's investment makes a huge contribution to that aim.
"This is not dependent on the introduction of congestion charging but will ensure that the adequate funding is available as soon as the council produces a robust final business case for the first tram line and related public transport improvements.
"Making this commitment now means that as soon as the final plan has been approved, work can begin on the route without further delay."
However, Scots Tory leader David McLetchie accused Mr Gray of pulling "a massive confidence trick".
The Lothians MSP said: "He says that funding for trams is not dependent on road tolls, but is dependent on City of Edinburgh Council producing a robust business case.
Trams disappeared from Edinburgh in the 1950s
"However, if we then look at the Transport
Initiatives Edinburgh Business Case - presented by the council in connection with the initial application and endorsed in the minister's answer today - it is clear that the business case is dependent on revenue from tolls.
"Public transport initiatives are welcome but trams should not be at the cost of tolls - we already pay enough in taxes."
Scottish National Party transport spokesman Kenny MacAskill welcomed funding for trams.
However, he said it was "vital" that regulations were introduced to protect a new tram network from predatory competition.
"Tram wars not must be allowed to replace bus wars on the streets of Edinburgh," he said.