By Jason Farrell, Senior Political Correspondent
Britain needs a third high-speed railway line to create "a northern powerhouse", George Osborne will say today.
The Chancellor will use a speech in Manchester to argue that he wants to go beyond the north-south HS2 to create an east-west HS3.
In doing so he hopes to create "a collection of cities - sufficiently close to each other that combined they can take on the world".
The east-west connection between Leeds and Manchester would be based on existing rail routes but speeded up with new tunnels and infrastructure.
The first phase of HS2 It is an effort to address Britain's financial dependence on London, which currently accounts for nearly a quarter of the country's economic output.
It will also be seen as an attempt to win support for the Conservatives outside their southern heartlands before the 2015 General Election.
Under current plans the £50bn HS2 project will provide 225mph trains from London to Birmingham in its first stage, before creating a Y-shaped network with lines to Manchester and Leeds by 2032/33.
The second phase would then connect Leeds and Manchester.
The high-speed network with HS3 George Osborne will say: "We are building High Speed 2, which will connect eight of the 10 largest cities in the UK, including Manchester, Leeds and Sheffield.
"Phase two is a £21bn investment, and will support at least 60,000 jobs. It's the most important investment in the north for a century."
A number of MPs with constituencies along the route are opposed to the project.
Mr Osborne will say: "Of course, there are opponents of the project - just as there were opponents of the original railways. I've discovered that almost everything worth doing in politics is controversial."
No timescale is in place for the Leeds-Manchester link.
:: Watch George Osborne's speech live on Sky News at 9am.
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