PLANS for a high speed rail network linking northern cities from east to west have been welcomed by politicians and business leaders in York as a key driver for investment in the city.

Sir David Higgins, chairman of High Speed Two, the company behind the £50 billion HS2 project, yesterday revealed his report on future phases of the much debated rail scheme.

He recommended the proposed second phase of the high speed network, the first phase of which will introduce high speed rail lines from London to Birmingham, continues along a Y shape towards Manchester and Leeds, with a spur linking to the East Cast Line at York.

The report also outlined future plans for a "HS3" scheme, which will improve rail services from east to west and cut journey times between York and Manchester from one hour 14 minutes at present to less than an hour.

Sir David said: "There is a clear market for improved services to York, Newcastle, and the rest of the North East.

"I remain, therefore, firmly of the view that an HS2 link to the East Coast Main Line is essential and justified to allow classic compatible services to these locations.

"This would reduce the journey time from York to London by 29 minutes, and Newcastle to London by 33 minutes, and journeys from both York and Newcastle to Birmingham would be cut by 67 minutes.

"These are substantial savings, and, just as importantly, they would also make it much easier for these cities to trade with each other and create the talent pools and economies of scale that a knowledge economy requires."

The report has been welcomed by the East Coast Mainline Authorities, which is chaired by City of York Council leader James Alexander, as the consortium calls for York Station to be transformed as "a HS2 Hub" providing the onward connection to the North East and North Yorkshire.

The group also believes an enhanced station will link with the HS3 proposals, and will help deliver the full potential of the large brown field York Central development site to the rear of the station.

Cllr Alexander said: "I welcome a reduction in journey times between York and Manchester to under and hour, and I am pleased this latest Higgins report continues to recommend York as the key location for HS2 trains to connect from high speed rail lines onto the East Coast Mainline and up to the North East .

"York is a railway city and such a strategic decision will see York continue being a railway city. This will encourage investment in the York Central development."

Barry Dodd, chairman of the York, North Yorkshire and East Riding Local Enterprise Partnership, also welcomed the report but said northern rail improvements needed to be given more priority.

He said: "I think the northern rail improvements recommended in the report are a great a idea, but really they should be coming before HS2, not as an add on.

"The only way we can go forward in the North is to link our big cities together with our metropolitan and non-metropolitan areas to create the critical mass to compete with London.

"Everyone is talking about increase journey times, but what improved rail links really gives is more critical mass to the north so it feels more cohesive."

Phase One of HS2 is due to be completed by 2027, with a 2033 completion date for the Phase Two, according to Sir David's report, which has now been submitted to Government for a final decision from ministers.