Twelve major projects have won £225m funding, while 15 smaller schemes will receive £41m from the Department for Transport.

This will be topped up with a further £194m funding from local authorities and businesses

Each of the projects will provide a transport package that delivers carbon savings and economic growth, and in many cases will see major investment in local transport infrastructure.

The successful schemes include a variety of measures including improving sustainable transport options for commuters, encouraging parents and children to walk to school, creating public transport hubs and building better cycling infrastructure.

Reading will get a London-style cycle hire scheme and a new pedestrian and cycle bridge crossing the Thames. There will also be new park-and-ride schemes and improvements to existing schemes to help commuters access key employment hubs.

On Merseyside, cash will go into better public transport and cycle infrastructure, linking areas of deprivation with areas of employment. The scheme will include real-time travel information and extra services for bus users as well as station improvements on the local rail network.

Nottingham will see its smartcard scheme expanded to cover all of the city’s buses, trams and trains.

Transport minister Norman Baker said: “The schemes we are funding will improve life for millions of people in towns and cities up and down the country and show that cutting carbon and boosting economic growth go hand-in-hand.

“Investing in these schemes shows that we are serious about funding infrastructure where there is a clear business case for doing so.

“The money we are putting into these projects will unlock much greater economic benefits for communities as well as improving the environment.”