The money will fund a 'full feasibility study' into the project

Manchester City Council has welcomed the news that the Government is to spend £7 million to examine the possibility of a future bid to host the Olympics in northern England.

Chancellor John Healey will use his Budget on Wednesday to announce a full feasibility study for a Northern Games, the Press Association reports.

In May, before Mr Burnham entered No 10, the Government commissioned an assessment by UK Sport which could inform a bid for the international sporting event in the 2040s.

Mr Burnham’s government is now to pledge £7 million for a full assessment of a future Olympic and Paralympic bid and a commitment to support UK sport.

The assessment will consider costs, socio-economic benefits and, ultimately, the chance of success. The Government said in May that the assessment was also part of a new 'growth drive' to use sports as a catalyst to power regeneration of towns and cities.

Prime Minister Andy Burnham said an Olympics bid would be “something everyone can get behind”.

"Few things bring a country together quite like the Olympics," he said. "I want people to feel that sense of excitement again, and to experience it in their own towns and communities, not just watch it on the telly.

"The games would unlock opportunity across our towns and cities for the whole country. From north to south, it would be something everyone could get behind and be proud of.

"We know we can put on the greatest show on earth. Now we want to explore how we can do it again, with the whole country behind it.”

The full feasibility study will look in greater detail at how the games would work in practice, including types of venues and transport links needed and the prospects of developing a winning bid.

The work will involve the Government, UK Sport, the Northern mayors and the British Olympic and Paralympic Associations, who would ultimately be responsible for a bid.

Mr Healey said: “The North hosting an event as big as this would be truly unforgettable.

“Britain’s experience of London 2012 is proof we can host the world. I’m picking up the pace on our work to potentially bid for these prestigious games.

“It will lift communities, create opportunities and give the UK a huge boost.”

Manchester was unsuccessful in a 1993 bid to stage the 2000 Olympic Games, which were ultimately awarded to Sydney in Australia.

The city did, however, succeed with a bid and hosted a memorable Commonwealth Games in 2002 - which led to an unprecedented legacy of urban regeneration, including the construction of what is now the Etihad Stadium.

Last year's Women's Rugby World Cup was staged in Twickenham, while next year the UK will host the Tour de France, and the EUROs in 2028.

Mayors and local leaders across the north of England have rallied behind the idea of bringing the Games to the region.

Councillor Garry Bridges, Leader of Manchester City Council, said that sport has had a 'transformative' impact on Greater Manchester.

"The 2002 Commonwealth Games was a huge moment for our city, acting as a catalyst for our economy boom, encouraging future growth and setting the stage for the development of some of the biggest names in world sport, right here in Manchester," he said.

"From major sporting events to highlights on the cultural calendar, Manchester has a proven track record of being able to shine on the biggest of stages.

"From inspiring the next generation of sporting stars to showcasing what our region has to offer to the world, this latest initiative is exciting and one that we are ready for and would eagerly welcome.

"This bid could be a defining moment for the north and it is a huge signal of confidence that the Government is so committed to sport in our region, and providing the investment needed to get the north's Olympic bid off the ground."