Business leaders are optimistic that long-delayed transport projects can finally have their day after the Government announced plans to devolve power.

The Department for Transport wants funding for major transport schemes to be determined in the regions, rather than by Whitehall bureaucrats.

The move paves the way for schemes including the dualling of the A303 and A30 through Somerset, filling the gaps in Cornwall's dual-carriageway and giving the A38 through Devon the status of a motorway.

A consultation was launched yesterday into the plans, which would see a budget given to a local transport body – made up of the Local Enterprise Partnership and councils – which would then agree which priorities to spend the cash on, based on the area's needs.

Currently, central government must approve all projects worth more than £5 million.

The new system will also "encourage" local transport bodies to come together to form "consortia" covering more than one LEP area to deal with larger strategic transport schemes, although the Government insists this would not be compulsory.

A number of LEPs are spread across the far South West, including one for Cornwall and the Isles of Scilly, another for Devon and Somerset and a third for Dorset.

Tim Jones, chairman of the Heart of the South West LEP, a joint venture between businesses and local authorities in Devon and Somerset, said leaders of the groups in the region yesterday met Cabinet minister Eric Pickles to discuss their enhanced role.

He said: "Transport schemes we have long lobbied for now stand a much more realistic chance of getting money. Mr Pickles said we should tell the Government what we want and they will have to give us a very good reason why they aren't going to do it. I think what we will see now is decisions made for economic-driven reasons rather than politically driven reasons."

The consultation proposes allocating money to the local transport bodies using a funding formula rather than a competitive bidding process. It is planned to be in place at the start of the next spending review period, in 2015.

Transport Secretary Justine Greening said: "We want a system that is much more responsive to local needs and it makes good sense to give local residents and passengers a greater say in the transport infrastructure that they rely on so much.

"These proposals could hand real power to communities so they can make locally accountable decisions on what transport improvements are needed in their area.

"This is a key plank to our localism agenda, freeing local authorities from central government control, so I look forward to responses from across the country."