A MULTI-MILLION pound project to link Southampton with surrounding towns by a tram system is being investigated by major regional business organisation.

The Solent Local Enterprise Partnership (LEP) has commissioned a feasibility study into creating the network which could eventually see trams run from Fareham to Southampton and then onto Romsey and Eastleigh.

The study was commissioned after the LEP’s Transport Investment Plan estimated that road congestion costs the Hampshire economy £0.4 billion per year.

The plan also highlighted the need for an integrated transport network to promote growth in the region.

Phase one of the “Solent Metro” network would see trams run from Eastleigh past the airport, down to a new station at Southampton St Mary’s, on to an interchange at Royal Pier, then back up to Westquay and Southampton Central railway station.

The plan also envisages the network - which could be trams or a light railway - being extended west to Romsey and from there back to Eastleigh, and eastwards to Segensworth.

A spur line heading down the Waterside to Marchwood could also be added.

Gary Jeffries, chairman of the Solent LEP, said: “We need to look at a package of measures that will help to determine whether the project will be a success from the feasibility study which we hope to complete towards the end of this year.”

He added that the scheme would cost the government “hundreds of millions” but added that the region had been “significantly under invested by the government’’ in recent years.

The study will look at the optimum routes for the Light Rail project with hopes to cover major Hampshire towns; however its main focus will be on Phase One - running trams from Southampton to Eastleigh.

Mr Jeffries added: “This initial phase would provide the catalyst for the delivery of the wider Solent Metro network, whilst improving connectivity, improving integration of ferry, air and rail, supporting improvements in air quality, reducing highway congestion, and reducing capacity challenges on mainline railway.”

Hampshire business and council leaders have welcomed the plans.

Stewart Dunn, chief executive of the Hampshire Chamber of Commerce said: “Southampton needs to compete on the world stage in terms of infrastructure and Southampton needs to play a major part in it.

“The proposed tram project will help to meet the demands of the Solent economy and will help to develop East-West transport links which are very poor,” said Mr Dunn.

Councillor Sean Woodward, pictured, leader of Fareham Borough Council, said: “Due to the significant economic benefit of reliable public transport I would welcome any prospect of gaining additional modes of transport along the coast, whether that be tram or water, but would caution against spending huge sums on consultants unless there is a confirmed intention by government to fund it.”

Brad Raynon, chief Executive of the Southampton Business Improvement District (BID) welcomed the plans saying: “The new plans will benefit the economy of Southampton as a new transport link and it would certainly be a huge economic benefit for the businesses and people of Southampton.”

Panel: The last trams ran in Southampton on February 4 1950 - almost exactly 50 years after the first service began in the city- when cars No.21 and No.101 made their final journey under their own power from Shirley depot to Portswood depot.

A tram link also called ‘Solent Metro’ was planned between Fareham, Gosport and Portsmouth, with the potential to link up with Southampton, in 1987.

The project’s budget more than quadrupled from £35million to £148million, and millions was spent on gauging support for the scheme and consulting experts on how Fareham, Gosport and Portsmouth could be connected via a multi-million pound tunnel under Portsmouth Harbour.

Currently four UK cities run tram systems - Sheffield Supertram, Midland Metro (Birmingham) Croydon Tramlink and Nottingham Express Transit.

The tram plan is not the only alternative transport scheme currently being considered. Last summer Hovertravel and Red Funnel both announced that they were looking into running services between Southampton and Portsmouth.

Last week it was announced that the M27 would become a ‘smart motorway’ with the hard should being used to ease congestion.