The multi-million-pound Borderlands Growth deal has reached another milestone after city chiefs in Carlisle backed the latest stage of the project.

The district council’s executive last night endorsed the governance structure, which spells how the five cross-border local authorities will work together to deliver the economy-boosting scheme.

Carlisle City Council, Cumbria County Council, Dumfries and Galloway Council, Northumberland County Council and Scottish Borders Council thrashed out a proposal submitted to the UK and Scottish Governments last September.

They have now signed the heads of terms agreement but the next stage involves formalising the finer points of the relationship between the different councils.

Carlisle City Council leader John Mallinson said the project would lead to hundreds of millions of pounds flooding into the region.

He said: “This is basically sorting out the governance. I think it’s very important that we get the governance correct, and we need to know exactly where everyone is coming from.

“There is an awful of goodwill from all partners, so I think it will run very smoothly with all the work that’s been done on this.

“There is such cross-border camaraderie really and this gives us an ideal opportunity to reinforce Carlisle as a regional capital.

“The Station Gateway project (the £15m revamp of the city’s station area), for instance, is obviously a wonderful boost for Carlisle but the people of Dumfries and Galloway see it as a big advantage for them as well. They have looked to Carlisle for centuries as a regional centre.

“I’m particularly pleased that this commitment will see hundreds and hundreds of millions of pounds coming into the area, both north and south of the border.

“It’s not a PFI that’s going to be dragging us down for 30 years: it’s real hard cash committed by the Government it and it will go a long way to developing Carlisle in the way in which we would like to see it develop over the years.”

The UK and Scottish governments will commit a combined £350 million cash injection to the region while the local authorities on both sides of the border will contribute a total of up to £44.5 million towards the deal.

This is expected to create a package worth up to £394.5 million for the region, generating around 5,500 jobs and boosting the regional economy to the tune of around £1.1 billion.

The plans include the overhaul of the Chapelcross power station in Dumfries and Galloway, a Mountain Bike Innovation Centre in the Scottish Borders; and the Berwick Theatre and Conference Centre in Northumberland.

The key strategic cross-border project will investigate the possibility of extending the Borders Railway from Carlisle to Tweedbank.

Coun Gareth Ellis told the meeting that the deal would also increase renewable energy possibilities and help tackle pockets of deprivation, particularly in the north of Carlisle.