Birmingham City Council is looking to receive nearly £350 million from the government for the £550 million New Street station refurbishment, but new Transport Secretary Ruth Kelly said 'there is still significant work to do' in the House of Commons.
Kelly's warning comes just a week before the Department of Transport publishes its five-year plan for the nation's rail network, which will decide whether the city receives an initial £120 million for the station refurbishment.
According to Kelly, ministers were still undecided over the ambitious Birmingham Gateway project, which London-based McAslan and Partners is part of.
She said: 'My department has been liaising with Birmingham City Council and challenging it to come up with plans that represent clear value for money.
'We are currently in a process of iteration, and the local council still has significant work to do to prove its case.'
The Department of Transport is understood to have voiced concerns after the council submitted documents which were meant to show how the proposed refurbishment offered value for money.