Manchester's Metrolink tram system is being extended in a �500m project.

The government has pledged �250m, with the rest coming from private investment.

The extension means there will be three new routes, with the network reaching Oldham, Rochdale, Ashton-under-Lyne, Wythenshawe and Manchester Airport.

Prime Minister Tony Blair said the tram system was a "first class public transport system".

Deputy Prime Minister John Prescott announced the cash boost and said it would make Metrolink the envy of Europe.

Guy Harkin, deputy chairman of the Greater Manchester Passenger Transport Executive, said millions of extra people would use the extended system.

He said: "The announcement means we will be able to treble the size of the network.

"It's not a little bolt-on, it's an order of magnitude improvement in the service."

Work will begin straight away, with most of the system being built on existing disused railway.

Mr Prescott said the government's money was designed to get the project going.

He said there would be negotiations with the developers, tram users and local authorities to discuss where the contributions towards the rest of the funding would come from.

"Here is the money to start now. Get on with it. We want to see it done," he said.

"Let's finish the negotiations in the next few months."

Criticised

The deputy prime minister, who has been criticised for the number of cars he uses, was asked if the tram link would encourage him to give up a vehicle.

He said: "I have one car, it's nine years old. Everyone knows I have a Jaguar.

"I have one car in Hull which is where I live and a government car which I can't use for private use. I can't pop to the pictures in it.

"The other car is a Rover. It's a party car which I can't use for government business."

Mr Prescott travelled to North Manchester General Hospital by tram, then left by car.