Housing Minister Grant Shapps signed off the next stage of the £115m PFI improvement scheme for the run down Pendleton area after being reassured it will deliver improvements that are value for money for local people.

The decision allows the council to select a winner from two shortlisted development consortia.

The Inspiral bid team of Wates and Countryside Properties is up against SP+, a consortium consisting of Bullock Construction, G & J Seddon and Barratt Homes.

Since the October public spending review, housing PFI projects nationally have been on hold to undergo further scrutiny from the Homes and Communities Agency.

Salford’s plans survived the review which means the city council can now push forward with its plan to completely redevelop Pendleton with a mixture of new housing and improvements to some 1,600 existing homes.

The council is drawing up a full business plan for delivering the scheme for the next government approval stage.

Councillor Peter Connor, Salford City Council’s lead member for housing, said: “Our plan for Pendleton will give residents a better choice of affordable housing and we’re pleased the government supports us in what we’re trying to achieve.

“There is still lots to do but this news allows us to move to the next stage, which is to submit further plans to the government so we can move to financial close and start work.”

Leader of Salford City Council John Merry said: “This review compared many private finance initiative projects, so for the government to choose to support us shows our plans are very well thought out and good value for money for the people of Salford.”