Prime minister Boris Johnson called for action and urged Manchester's leaders to work with Westminster on imposing Covid restrictions in the city amid rising infection rates in the region.
Mr Johnson said he was "concerned" about increasing coronavirus cases in Greater Manchester and would prefer to work "with the help, support, the leadership of local authorities" to help stem the rise.
His comments come after his foreign secretary said the government has the power to impose tougher and other towns amid a growing row over the tough new measures.
The prime minister said: "I’d rather not impose things, I’d much rather work out something with local authorities with the mayor, but it’s up to local leaders to show the kind of leaderships that we’ve seen in Liverpool, Lancashire and in London."
He paid tribute to Liverpool City Region and to Lancashire for adopting the tiering system.Local politicians and the government are at loggerheads over the level of financial support Greater Manchester would get if it is forced, like Liverpool City Region and Lancashire, to accept the most severe coronavirus restrictions – a disagreement that has so far prevented the region from being moved into Tier 3.
The prime minister did not address these concerns, but said for the stricter measures to work it was "crucial" local leaders were onboard.
"In London, you’ve seen the mayor come onboard as well and that’s very important. Because clearly if you’re going to enforce these measures, if you’re going to do proper testing and tracing, if you’re going to get local buy-in and compliance then local leadership is crucial and we want to work with local leaders," he said.
"I have to say, I’m concerned about what’s happening in Manchester where clearly the levels of infection are rising steeply; the level of hospitalisation is rising steeply and we do need to see action."
Earlier Mr Raab had accused Greater Manchester Mayor Andy Burnham of trying to “hold the government over a barrel” by resisting tougher coronavirus restrictions and accused Labour of "political confusion" over what he suggested was mixed messages.
The foreign secretary told BBC Breakfast: “Ultimately we need to take action – we can’t have a situation as we have seen in Manchester where Andy Burnham is effectively trying to hold the Government over a barrel over money and politics when actually we need to take action."
Mr Burnham hit back at Mr Raab on Twitter said it was about "fairness".
"It’s not about what we want for ourselves, @DominicRaab. It’s about what we want for low-paid and self-employed people everywhere: fairness."
He later told ITV News: "There’s a curious situation where we’ve got Andy Burnham in Manchester resisting targeted localised measures and Keir Starmer the leader of the Labour Party calling for a nationwide, albeit temporary, lockdown. That seems to me political confusion. The Labour Party and Andy need to explain," the foreign secretary told ITV News.
He said the government's door was "always open".
"We’ve worked very effectively with Steve Rotheram in Merseyside, with Sadiq Khan in London. We want to continue that best practise with all of our leaders across the country."
In a joint statement, northern mayors said "this is a fight for what is right" as they warned the government's financial package for the hardest hit regions would "not prevent severe hardship".
The statement from Mr Burnham, Jamie Driscoll, Mayor of North Tyne and Steve Rotheram, Mayor of Liverpool City Region, said: “The Government is claiming that the North is divided and only interested in getting what we can for our own region.
“That is simply not the case.
“We are all united in fighting for an 80% furlough scheme for all people affected by regional lockdowns, wherever they are in the country. Paying two-thirds of salaries will not be enough to protect the jobs of thousands – it should at least match the 80% that was available under furlough, with the minimum wage as the minimum support.
“The Universal Credit top-up is not the answer. It doesn’t help everybody and takes weeks to come through. It will not prevent severe hardship for thousands of low-paid workers before Christmas.
“But we won’t forget the self-employed and freelancers and other business who will be affected by these lockdowns, they also need support and we stand firm for those too.
“This is a fight for what is right.”
One council leader accused the government of "trying to divide" the North of England by "bullying" leaders into accepting new Covid tier regulations.
Head of Preston Council Matthew Brown told ITV News that Westminster had threatened to withdraw funding, and said he had been warned communities would be left "significantly worse off" if leaders did not impose tougher coronavirus measures on Lancashire.
The northern leaders' stand-off with Number 10 comes as Tory MPs step up the pressure on Mr Johnson over his handling of the second Covid wave. Senior Tories warned Number 10 that there is now a growing rebellion on its own backbenches over the bid by ministers to encourage more areas to accept the most stringent measures.
Defending the government's approach, Mr Raab told Sky News: “I think the right thing both on public health grounds but also supporting the economy, supporting jobs, livelihoods, supporting our society and the most vulnerable in it is to avoid a second national lockdown.
“The way to do it is with a tiered approach that we’ve advocated. That will only work, the scientists tell us, if everyone really leans in and implements it to the maximum.”
In an impassioned press conference on Tuesday, Mr Burnham accused the Government of treating the North “with contempt” and of trying to make it the “sacrificial lamb” for unproven measures that were being carried out “on the cheap”.
The Labour politician also said deputy chief medical officer for England, Professor Jonathan Van-Tam, had told regional leaders that only a national-style lockdown was sure to have an impact on the rising number of Covid cases.
Covid tiers: What are the differences between each alert level?
Medium (Tier 1) - Rule of six applies indoors and outdoors. Pubs and restaurants close at 10pm.
High (Tier 2) - Households must not mix indoors in any setting including pubs and restaurants. Rule of six applies outdoors
Very high (Tier 3) - Households must not mix indoors, or in private gardens. Rule of six applies in outdoor spaces including parks. Pubs and bars which don't serve meals will be closed
But senior Tories were among those arguing for Greater Manchester to be left out of the strictest freedom curbs, which includes closing large swathes of the hospitality sector.
Sir Graham Brady, chairman of the influential 1922 Committee of backbench Tories, said it would be “very foolish” for Greater Manchester to move into Tier 3.
Former minister Steve Baker suggested that there was even growing concern among the ministerial ranks about the Government’s handling of the crisis.
He said it was Mr Johnson, Mr Hancock and Michael Gove, Chancellor of the Duchy of Lancaster, who were driving the current local lockdown approach.
Half the population of England, 26.7 million people now face being under stricter lockdown measures from Saturday.
London will move into Tier 2 of the alert system from Saturday, banning people from separate households mixing indoors – including in pubs and restaurants.
Essex, Elmbridge, Barrow-in-Furness, York, North East Derbyshire, Erewash and Chesterfield will also move into the second tier of measures.