THE Government's first payment towards the regeneration of Oxford's West End will allow the £1.5m scheme to transform Bonn Square to be brought forward.

The Government confirmed its backing for the multi-million-pound scheme to redevelop a quarter of the city centre by pumping in an initial £1.16m.

And the regeneration scheme was further boosted today by news that the Environment Agency has withdrawn its objections to the £300m Westgate redevelopment on the eve of a key planning vote.

The Government windfall came as Oxford was confirmed as one of 29 growth points where the Government wants to see a growth in housing and jobs.

Oxford City Council says it hopes to invest £750,000 of the new money into the long-awaited plan to reclaim Bonn Square as "a 21st-century space". The run-down square has long been one of the city's most trouble-plagued areas. A high-profile competition was held to attract designs, which attracted more than 100 worldwide entries.

It was won by the Edinburgh firm of architects, Graeme Massie. But, although the scheme secured planning permission in the summer, lack of finance dampened hopes of any further progress.

The new money should mean work on Bonn Square can go ahead next year. The problem of buses in Queen Street will mean the redevelopment should take place in two phases, with work expected to stretch over nine months.

The windfall will save the city having to spend months seeking contributions for a new-look Bonn Square from businesses.

But a major contribution is still expected to come from the consortium behind the Westgate Centre redevelopment, provided the scheme wins planning approval.

The square will be surfaced in sandstone, giving it a unified and uncluttered look.

It will be lit by four 15-metre-high lighting columns on the west of the square, together with stud lights in the ground under new trees planted on the east of the square. The Tirah Memorial remains in its current position.

The history of the site will be played out in a programme on two LED screens on an arts totem that can also be used for commissioned works of art. Five bronze sculptures will also interpret the history of the site.

The leader of Oxford City Council, John Goddard, said: "We submitted a list of detailed projects and, subject to discussions with the Government, Bonn Square is the front-runner. It would be very nice to get on with this scheme.

"Our vision is to transform the west end of the city centre to create a new vibrant urban quarter. This renaissance will strengthen Oxford's future as a modern city of learning, culture and innovation. We hope the money represents a first tranche. The intention is that there will be a continuing partnership with the Government. We hope for continuing funding and support for the whole regeneration project."

Money will also go towards feasibility studies on redeveloping Frideswide Square and investigating whether the ice rink should be replaced or refurbished. There is also likely to be an investigation of buses in the city centre.

The Environment Agency's decision to withdraw its objection to the Westgate development was announced in time for Monday's key meeting of the city's strategic development committee.

The EA had objected to the scheme because it said the worsening threat of city centre flooding had not been properly addressed. It also claimed insufficient account had been taken of research on flood levels.

But the EA has told the council it is now happy that its concerns have been addressed and developers had taken into account latest flooding models.

The West End regeneration has qualified for support under the new Growth Points scheme, largely because of the inclusion of plans to create up to 1,000 new homes.

Didcot was also named as a growth point, and South Oxfordshire District Council received £1.1m. Swindon and Reading are also confirmed as growth points.

Keith Mitchell, the leader of Oxfordshire County Council, one of the partners in the West End Steering group, said private-sector investment would hold the key to the success for the regeneration.