Boris Johnson has backed the controversial HS2 high-speed rail link, despite concerns over mounting costs and the impact on the environment.
Speaking in the House of Commons, the prime minister said the project was “not just about getting from London to Birmingham and back".
The project would see 400m-long trains, travel from London at speeds of up to 250mph.
Mr Johnson also committed his government to Northern Powerhouse Rail (NPR), a project designed to transform rail services in the North, linking Liverpool with Newcastle.
The prime minister said we would work closely with northern leaders to “deliver one integrated master plan High Speed North.”
Work on finalising plans for the NPR would run alongside HS2, the first phase of which is due to open at the end of 2026.
Nick Forbes, leader of Newcastle City Council, said HS2 and the wider investment in the East Coast Mainline was "essential".
Northern Powerhouse Rail could include a new Leeds-Newcastle route via a junction off HS2 and upgrades to the East Coast Mainline through York, Darlington and Durham. The prime minister said that "none of that... makes any sense without HS2."
Jonathan Walker, assistant director of policy at the North East England Chamber of Commerce, said the decision was “great news for the North East”, but cautioned:
Any review of the later phases must be used to ensure HS2, Northern Powerhouse Rail and East Coast Mainline are integrated properly, rather than as seen as a chance for further delays.
The prime minister said that he believed in the "fundamental value" of HS2 and promised to “restore discipline to the programme.”
The project’s initial budget was £32.7 billion at 2011 prices but a leaked review by Douglas Oakervee last year found it could cost up to £106 billion.
To oversee the project, Mr Johnson said he will appoint a minister along with a ministerial oversight group that will be "tasked with making strategic decisions about it".
Rail manufacturer Hitachi, which has a plant in County Durham, said the decision was “a symbol of confidence” in the UK and “great news for the whole country.”
Hitachi is one of the companies vying for the £2.5 billion contract to build the trains for the new line.
As Britain’s biggest train manufacturers, we’re excited to continue our joint bid to design and build the Great British train here in the UK. It would support thousands of manufacturing and supply chain jobs and unite the Midlands and the North. It’s time to work together to deliver the full benefits of HS2.
Mr Johnson said the Northern Powerhouse Rail project would go ahead, but that a review would ensure that "methods and costs" were "interrogated" as the project progresses.
Asked by former transport committee chair Lilian Greenwood MP about the legislation necessary for the second state of the project, the prime minister refused to comment.
High-speed trains would also run beyond the new lines on existing tracks as far as Edinburgh and Glasgow.
Trains serving Newcastle and Edinburgh could stretch to 400 metres - the length of nearly four football pitches.
HS2 Ltd - the Government-owned company responsible for developing and building the railway - says it will boost capacity and cut journey times.
Mr Johnson's announcement came as the Government pledged a £5 billion cash injection to overhaul bus and cycle links in English regions outside London.
Andy McDonald, shadow minister for transport, called for HS2 to run "under public ownership" when it opens.
"The public are spending a lot money on HS2. When it opens, services should be run under public ownership, so taxpayers see a return on their investment rather than lining the pickets of private or foreign state-owned companies."