Southampton could be handed a raft of new powers from Whitehall in an attempt to create thousands of new jobs, the Government will announce today.

Ministers said the new deal would help the city bounce back from the devastating closure of the Ford plant at Swaythling, and the loss of 500 jobs.

If the joint bid from Southampton and Portsmouth is successful, it would be a major change in the way the area is run, with powers over transport, spending and infrastructure devolved from the Government to council bosses.

The Solent area is today named as one of 20 competing for a new City Deal, which the government says will be “absolutely transformative” to each successful area.

Deals have already been struck with the eight largest cities outside London. Bristol is getting long-awaited rail improvements, Birmingham got £25 million for a new medical centre while Liverpool was promised £75 million to boost the economy.

Each offer would be tailored towards the local area, with council and business leaders drawing up a wish-list for the improvements they would like control of.

Cities Minister Greg Clark told the Daily Echo: “Southampton and Portsmouth together have such critical mass that we think it’s very in their interests to work together.

“We want ideas that will really transform an area, attract employers and create jobs. The opportunity is there, for the first time for decades, for cities to say ‘this is what we want to do’ rather than be controlled from Westminster.”

Bids are expected in the next few weeks, while the new deals could be up and running in a year.

Ministers will come under pressure to favour Southampton’s bid after the closure of the Ford plant.

Mr Clark added: “Of course it was disappointing for everyone in Southampton, and certainly the people who had worked there and given their all.

But Southampton has a hugely bright future, and we are determined to do everything we can to help it achieve all of the opportunities that are available, and this is one way of doing that.”

Click here for all the latest fall out to the Ford closure