Environment secretary John Prescott will unveil his 10-year plan for transport later this month. It will include a series of initiatives designed to answer the government's critics of its treatment of rural areas and the motorist.
Two-thirds of the new money will go into public transport, with around 25 new tram schemes being planned for city centres. But Mr Prescott will also signal that he is ready to embark on major new road-building projects.
Whitehall sources say that with up to half the money coming from private finance, the overall investment in transport will top previous estimates of£140bn over 10 years.
Under the plans for transport, bus services will be increased to cover more market towns, while 100 new park-and-ride schemes will be created - adding to the existing 70.
A Whitehall source said: 'This is about bringing local people into the jobs market, creating links between towns and helping those who feel cut off.'