Oxford's Capital of Culture bid was always going to struggle against the stunning regeneration effort of Liverpool.

While Oxford promised to resurrect the waterways with a new canal basin on the site of the Worcester Street car park, the Merseyside rivals launched a £750m redevelopment programme, a £70m clean-up, approval for a £225m tram system, and a £70m programme to redesign public squares.

Liverpool's bid organisers stressed Merseyside's rich popular culture, including its musical history and sporting achievements.

Its architecture, galleries, theatres, concert halls and museums also formed a key part of the bid, but its trump card was the legendary humour, warmth and hospitality of its people.

A few key ingredients included The Beatles, Liverpool, Everton and Tranmere Rovers football clubs, the Walker Art Gallery, the Philharmonic, the Liver Building, writer Alan Bleasdale, the Mersey ferries and actor Ricky Tomlinson.

Merseyside estimates that the title of European Capital of Culture will generate 14,000 jobs, 1.5 million extra visitors and £2bn investment.

Oxford, perhaps aware that it was an outside bet, was always careful to limit its spending, and an initial input of about £160,000 was dwarfed by the millions invested by rivals. The bid incorporated the city's stunning architecture and rich history as a university city, but major new ideas to attract judges' votes were limited.

A claim that the bid was too elitist led to the promise of a massive carnival in the Cowley Road area in 2008.

Bid organiser Oxford Inspires will now focus on selecting which proposals can become reality.

The redevelopment of the Oxford Prison site and plans to turn the town hall into an arts centre will transform the city over the next few years but came too late to boost the bid.

Oxford Inspires chief executive Robert Hutchison said that although the city was best known for its historical architecture, universities and seats of learning, it was not a city stuck in the past. He added: "Oxford has a very strong and successful past of which we are proud but it also has a successful present and even brighter future."

There was disappointment for favourites Newcastle-Gateshead, which offered the Millennium Bridge on the Tyne, the Baltic Arts Centre and the Sage Music Centre.

Bristol boasted the legacy of Isambard Kingdom Brunel and Wallace and Gromit, while Cardiff offered the new Welsh Assembly, St David's concert hall and the Millennium stadium.

Birmingham cited its symphony orchestra, the Royal Ballet and a new convention centre.