Partners behind the Edinburgh and South East Scotland City Deal hope to have a deal agreed by early next year after both the UK and Scottish governments showed their commitment to the £1 billion project.

Comprising the Scottish Borders, City of Edinburgh, East Lothian, Fife, Midlothian and West Lothian local authority areas, the City Deal hopes to secure a £1bn infrastructure fund, with priority areas for investment likely to include transport, housing, economic regeneration, energy and digital connectivity.

City of Edinburgh Council leader, Andrew Burns, said: ‘‘The partners that make up the Edinburgh and South East Scotland city region are delighted to have received commitment from the UK and Scottish governments to develop a city region deal that will deliver a step change in economic performance while tacking inequalities.

“Detailed discussions will take place in the New Year and we are aiming to have a deal agreed by the spring budget in March 2016.”

The Edinburgh and South East Scotland City Region Deal would cover six local authority areas –the Borders, Edinburgh, East Lothian, Fife, Midlothian and West Lothian –

A proposal was submitted to the Scottish and Westminster governments on 4 September by the six councils, which represent 24 per cent of the population of Scotland and around 30 per cent of the county’s economic output.

The City Deal is designed to increase growth through investment in innovation, skills and infrastructure and it is estimated that if the bid is successful, it could attract an additional £3.2bn worth of private sector investment.