A second bid for Merseytram is on the horizon after transport secretary Ruth Kelly, said that "if the proposal was resubmitted, there would be no prejudice against it".

The tram scheme, whose route would link Kirkby to Liverpool city centre, was originally scrapped in 2005 by then transport secretary Alistair Darling over spiralling costs, withdrawing £170m of government funding. Merseyside PTE, Merseytravel is understood to be "crunching the numbers again", with the cost benefit ratio for the scheme having improved.

Last week, Merseytravel chair Mark Dowd also chair of the all-party Merseytram Committee said: "We remain fully committed to Merseytram and have the powers to begin work on the project until February 2010.

"The case for a tram system is stronger than ever," he added. "We will do all we can, within our power, to help make this a reality."

The case for Merseytram could be supported by the potential move of Everton Football Club's stadium to Kirkby. It is also strengthened by Liverpool One, the £1bn project in Liverpool's city centre comprising 160 new shops, restaurants, housing, hotels and cinemas.

Liverpool One chief executive Joanne Jennings has been in talks with Merseytravel about how to move the million extra shoppers expected to visit the development. Jennings said that trams "should be put back on the agenda".