A referendum should be held to test popular support for an ambitious road-charging scheme in Manchester, a business lobby group said on Monday, as Ruth Kelly unveiled a £2.8bn ($5.5bn) package of measures to tackle road congestion in the city.

The transport secretary announced £1.5bn of government grants for 23 improvement schemes to Greater Manchester’s public transport system, including extensions to the Metrolink tram network and new transport interchanges in the outlying boroughs.