TRANSPORT Secretary Philip Hammond has given the go-ahead to motorway improvements which are seen as vital to the Exeter economy.

The works to Junction 29 of the M5, viewed by business leaders as the city's "front door", were among seven local authority schemes totalling £1.6 billion given the green light by the Government yesterday.

The approval for the scheme has been welcomed as an "early Christmas present" by business leaders because it paves the way for the development of Skypark, Exeter Science Park and the Cranbrook new community.

The announcement came after the Department for Transport saw its building cash slashed by 11 per cent in real terms in the Government spending squeeze.

The future of the improvement works had been in limbo ahead of the Whitehall spending review that ushered in a raft of cuts totalling £81 billion.

Tim Jones, chairman of Devon and Cornwall Business Council, said: "This is a very early Christmas present. We have been campaigning for this project because it opens the door to the future of Exeter and the sub-region.

"It's absolutely vital to our future economy and will benefit the whole community of Devon. These are economy-changing projects and it's quite simply what we have been asking for over the last five years." Labour MP for Exeter Ben Bradshaw said: "I am pleased that the Government has listened to common sense on Junction 29.

"To have cut the scheme would have been wholly counterproductive, costing growth and future jobs in the area.

"I'd like to congratulate Exeter Chamber of Commerce, Exeter City Council and others whose lobbying helped ensure these improvements have been saved."

Councillor Sara Randall Johnson, leader of East Devon District Council, also welcomed the announcement, saying: "This is great news and shows how committed the Government is to unlocking housing and economic growth in East Devon.

"It demonstrates just how valuable these works are to the successful delivery of Exeter Science Park, Skypark and the new community of Cranbrook."

Mr Hammond told the House of Commons yesterday: "While we have had to make some tough choices, I am pleased that spending on transport was treated as a priority for the Government in the spending review.

"This Government sees transport as a key driver of growth nationally and in the regions.

"So I am delighted to be able to give the green light to 24 new transport projects and a fund worth over £600 million for many more schemes to bid for.

"For every pound we spend on Highways Agency schemes, on average we will get back £6 of benefits and in many cases there are higher return for local authority schemes.

"Transport is vital to securing the UK's long term prosperity.

"That is why these schemes are so important and why I will continue to argue for investment which delivers long-term benefits for both the travelling public and the economy as a whole."

Including projects already announced by the Chancellor, a total of 24 transport infrastructure schemes will now go ahead, while 56 others are fighting over a £600 million funding pot.