An agreement has been struck for councils to borrow £40m to complete Norwich's controversial Northern Distributor Road (NDR) - and to use money raised from house building to pay back the debt on the loan over 25 years.

Work on the £178.5m road is due to start next month. The 12.5 mile road is due to stretch from the A47 at Postwick to the A1067 Fakenham Road, but the cost of the section between the A140 at Norwich International Airport to the A1067 is not yet covered.

Norwich City Council cabinet and full council tonight agreed City Hall would join forces with Norfolk County Council, Broadland District Council and South Norfolk Council to borrow up to £40m for that stretch of the road.

The thinking is that the loan and the interest repayments can be paid back using what is known as the community infrastructure levy – a tax imposed on developers who build new housing.

But Andrew Boswell, leader of the Green group at Norwich City Council, and a long-standing objector to the NDR warned the use of the community infrastructure levy on the road would prevent other community projects happening.

He said: 'In terms of what could be achieved in the city, I see that as a toxic debt, preventing us from doing good things in the city.'

He said a more pragmatic approach would be to stop the road at the A140, rather than continuing to the A1067.

But Alan Waters, Labour leader of Norwich City Council, said spin-offs from the road, through a package known as the Norwich Area Transport Strategy, would see improvements to public transport.

Ahead of the meeting of the full council, a group of protestors, including Green councillors and members, Friends of the Earth and Greenpeace, campaigned against the road on City Hall's steps.

The county council is awaiting sign off on £10m the government pledged towards a £30m funding gap for the project, caused by rising costs. County Hall and the New Anglia Local Enterprise Partnership have also agreed to put forward £10m each.

Initial work on the road, which has been more than a decade in the planning, is then due to start next month, with full blown construction commencing next February or March.

Supporters of the road say it will be a shot in the arm for the economy and reduce rat-running. But critics say it will increase traffic and pollution, while causing swathes of countryside to be concreted over.

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