PRIME Minister David Cameron says a proposed deal worth hundreds of millions of pounds for Oxfordshire should be used to ease jams on the A34 and A40.

The Witney MP said the “crucial” routes needed more money.

Officials are preparing a bid for a complex scheme that could eventually see millions of pounds spent to fund major transport projects and create jobs in Oxfordshire.

And Mr Cameron said that the project, a so-called city deal that would give the region more powers and more freedom to attract private investment, would be “excellent” for the area.

However, he could not say how much money the Government would fork out on the deal if it went ahead – amid concerns that the office of Deputy Prime Minister Nick Clegg has watered down the plan.

In an exclusive interview with the Oxford Mail, the PM said: “Clearly the A34 and A40 are key arteries for our county. More needs to be done. The city deal I think is an excellent idea.”

He appeared to dampen expectations of a major cash injection for the region by saying there was not much new money available. But he said that it was up to officials to think creatively and tie up plans with other funding schemes to bring more benefits to the area.

“Sadly, there isn’t a huge amount of new money to be put into the city deal,” he said.

“But I think if central Government says, right, what have we got going on in Oxfordshire that we can put into the pot and Oxfordshire looks creatively at what land is available, what schemes we can help fund and everyone works together, then we can come up with something bigger.

“The city deals in other parts of the country I have seen for myself are making a difference, and I’m sure the Oxfordshire one can do as well.”

City deals are the latest in a series of attempts to kickstart economic growth in cities – and come in the wake of decades of criticisms that too much of Britain’s economy is focused on London.

Initially the deals were offered to eight cities – Bristol, Birmingham, Nottingham, Sheffield, Manchester, Liverpool, Leeds and Newcastle – and a second wave of deals opened up earlier this year to 20 other areas.

Oxfordshire is due to submit plans to unblock log-jammed county roads to secure £1.9bn of funding.

But the Government has changed the way it funds infrastructure projects – meaning less cash might eventually be offered.

The county was originally planning to use £800m of public sector investment, £1bn of private sector funding and £115m from the Government to create 33,250 jobs and build 7,500 homes.

But it is now not known how much money the initiative will unlock after the Government changed the rules.

County council leader Ian Hudspeth said: “It’s a shame that we have had to scale it back, but the Cabinet Office has said: ‘tone it down a little bit’.”

Labour group leader Liz Brighouse said: “All of us in local government should be very concerned about how this is moving forward.”