Transport secretary Ruth Kelly has backed Greater Manchester's proposed congestion charge.
In a statement to the Commons, Kelly said 30,000 future jobs in the area were believed to be at risk if traffic problems there were not resolved and pledged £1.5bn in central support to it.
The peak-hour charge, based on a city centre and an outer ring road band, would go alongside 22 miles of new Metrolink routes as well as improved bus rail and cycling facilities, she told MPs.
In a Commons statement, she said there would be a public consultation, with a final bid expected to be submitted for ministerial approval in the autumn.
"Greater Manchester's proposals demonstrate their determination to develop innovative approaches to tackling congestion for the benefit of the economy and the mobility of people living in the city region," she said.
But shadow transport secretary Theresa Villiers said three out of 10 local authorities affected were opposed to the package - with one demanding a referendum.
She said people were being told that unless they accepted the congestion charge, they would not get any of the extra money for improving public transport.
"This is bullying, pure and simple," she said.
Businesses opposed to the £5 charge to enter the city centre have joined calls for a wide-scale public vote on the scheme - which is backed by Manchester City Council and a number of other local councils in the Association of Greater Manchester Authorities.
Opponents, including many major local employers, say it would be the world's biggest congestion charging zone and hit business and local people.
Local firms Kellogg's, Unilever and property developer Peel Holdings are members of the Greater Manchester Momentum Group (GMMG), formed to fight the scheme.
GMMG chairman Andrew Simpson said: "Manchester will be a guinea pig for yet another unnecessary tax, making it harder to do business, create jobs and attract inward investment. Worst of all, the city will take on £1.8 billion of debt to supplement this award as the economy falters.
"There are real, cheaper alternatives to cut congestion and we believe everyone, from the business community to ordinary working people in Greater Manchester, should have a right to vote on this critical issue. Now is the time for the government to take a lead in this debate."
Dods Parliamentary Communications Ltd