A congestion charge is to be introduced in Manchester as part of a £2.8 billion transport package.

Under the new scheme, drivers will have to pay up to £5 to enter the city centre at busy times and improvements will be made to public transpost.

Transport Secretary Ruth Kelly told the Commons that ministers backed the scheme "in principle" and would work with Greater Manchester to develop it.

She said £1.5 billion of central government funding is being made available to meet the cost of the package.

"Only vehicles crossing the outer or inner ring into the city centre in the morning, and leaving during evening peak time, will face charges," Ms Kelly said.

She told MPs the peak-hours only charging scheme was considered "central to the success of the package".

Ministers are also in discussion with other towns and cities about similar schemes to tackle congestion in their areas.

The majority of the improvements to public transport will take place before the introduction of a congestion charge in 2013.

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