Birmingham City Council could become the first local authority to raise cash by issuing bonds.

The move would see the council take advantage of relaxed government controls over council funding.

Britain's second city is set to make the move to refinance debts on its National Exhibition Centre, which it refurbished and and expanded in the 1980s, the Financial Times reported.

So far only the Transport for London agency has exploited the opportunity available since last year for regional government to raise funds in this way.

TfL collected £200 million in December last year on the bond markets as part of its investment programme for the Capital's underground and bus networks.

But town halls have otherwise been shy to take up the opportunity created by ministers last April, offering an additional avenue for investment in the public sector.

The move provides the opportunity for people to invest directly in the town in which they live, becoming financial as well as political stakeholders.

However Birmingham is set to concentrate on attracting investment from big financial institutions as the council seeks to make the most of low interest rates currently on offer.

"We are thinking about issuing some bonds to refinance the NEC," said chief finance officer Stephen Hughes.

"The original financing was done off-balance sheet because of restrictions on local authority borrowing.

"We are going to use prudential borrowing to purchase back the original stock and issue new bonds."