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The government will back plans for high-speed rail links to Manchester and Leeds, Transport Secretary Philip Hammond has said.

The planned new 250mph rail route between London and Birmingham aims to cut the journey time to 49 minutes.

North of Birmingham, ministers prefer plans for two lines - one to Manchester and one via the East Midlands and South Yorkshire.

Mr Hammond said plans would "transform the economy" in north-east England.

Plans for a new high-speed rail link were announced under the previous government in March.

It was backed in the coalition deal between the Conservatives and the Liberal Democrats, but they said that, given financial constraints, it would have to be done in phases.

They have said no final decision will be taken until a full public consultation, due to start in 2011, has been carried out. Building work is not likely to start until the next Parliament - 2015 at the earliest.

In his speech to the Conservative Party conference in Birmingham, Mr Hammond said consultation would begin in the new year on the preferred route of the London to Birmingham leg of the rail network.

But he announced that ministers' preferred option for the link north of Birmingham would be for two separate corridors.

One would go direct to Manchester, which would connect to the west coast mainline, and the other via the East Midlands and South Yorkshire, with stations in both areas, which would connect to the east coast mainline north of Leeds.

The so-called Y-option will be the government's preferred option over an S-shaped line from Birmingham to Manchester, then across the Pennines to Leeds. The two lines are estimated to offer a greater return on the investment.

But details of the exact routes have not yet been worked out. The Conservatives say the government will consult on options early next year.

They say the new rail routes would reduce journeys from London to Leeds to 80 minutes - down from 140 minutes at present and from London to Manchester to 80 minutes from 128.

The plan is for the new rail network to be linked to Heathrow Airport and the existing high-speed line between London and the Channel Tunnel.

Mr Hammond said the scheme - estimated to cost £33bn - would "make rail the mode of choice for most inter-city journeys within the UK" and would change "the economic and social geography of Britain, connecting our great population centres and our international gateways together".

He said it would help rebalance economies that the government believed had become too dependent on the public sector - by encouraging business investment in regions which have been considered too far away from London.

"By creating a smaller Britain, where literally journey times from Leeds to London will be about 80 minutes, we change the geography, we change the way people think and we change the opportunities that are available."

He added: "This great connectivity is fantastic news for the North East and other regions and will transform the economy, I have no doubt about that at all.

Mr Hammond also confirmed plans to scrap the M4 bus lane and said Britain's railway network had to modernise - to bring down costs and increase efficiency.

Friends of the Earth spokesman Tony Bosworth said the government must ensure any new rail network led to an overall cut in carbon emissions from transport.

He said: "A fast and efficient electric high-speed rail system could help reduce domestic flights and car journeys, but it will only be a low-carbon travel alternative if it is powered by renewable energy."