By Nick Golding
Ruth Kelly appears on the cusp of sanctioning the eight core city regions' bids for new powers - despite their continuing resistance to elected mayors.
Ms Kelly said: 'We are in the process of looking through our response to these core city business cases and I'm pretty convinced by some of the arguments made.'
Her enthusiasm for their proposals, revealed at the Labour Party conference, marks a change from her previous insistence that cities concentrate on improving leadership structures - a stance regarded as a call for at least some of the areas to take a lead by opting for an elected mayor.
Although she insisted devolution would only occur if leadership models were 'clear,
deliverable, transparent and accountable', she went on to praise Greater Manchester's submission based on an executive board of council leaders.
Speaking of the eight proposals, she said: 'It may be they say on the basis of their current capacity to work together they are just at the beginning of the process and we can take it forward [over time].'
The cities - Birmingham, Manchester, Leeds, Liverpool, Newcastle, Bristol, Sheffield and Nottingham - together with the smaller councils surrounding them, anticipate this month's local government white paper will give them formal backing to proceed with their plans.
Richard Leese (Lab), Manchester City Council's leader, told LGC: 'I'm not sure there is a wrangle about leadership. What the government is saying is that if they are devolving more powers they want to know where they are going.'
Sheffield City Council chief executive, Sir Robert Kerslake, said: 'I think they are very positive about what we are doing.
'There's a recognition of a journey going on at different paces and with different stages in that process for different cities.'
ANALYSIS - LABOUR'S CASE OF DEJA VU
By Nick Golding
Local government's cabinet representative toured the Labour conference promising devolution and freedom. Sounds familiar?
This happened both last week and at last year's party conferences. David Miliband's promises in Brighton 2005 were superseded by Ruth Kelly's when Labour gathered in Manchester.
Things haven't changed much in all that time. However, the delayed white paper first promised a year ago is now just weeks away and the conclusion of the delayed Lyons review will report in just three months.
But still one gets the impression local government is not exactly at the forefront of many ministers' minds.
Prime minister Tony Blair gave it only a passing mention in his conference speech. Gordon Brown promised devolution, but until he gets round to speaking specifics many will remain unconvinced that democratically elected representatives will be the beneficiaries.
The past year has shown how the new era of localism is susceptible to outside events. David Cameron's new-found green credentials led Mr Blair to move the equally youthful Mr Miliband to environment to prioritise it as a Labour issue and the white paper was delayed as a result.
Similarly, the Blair/Brown transition could well distract ministers from making decentralisation a priority. Local government must hope the wind blows in its favour.