MAJOR new settlements should be built near Bicester and the town itself expanded, according to a Government-backed report.

The National Infrastructure Commission (NIC) has called for £1bn to be invested in the East-West Rail link between Bicester and Bletchley and plans for housing developments to be drawn up.

Garden towns and even ‘city-scale’ developments could be built along the route and the town itself could also expand as part of the anticipated growth brought by the new railway line.

It is expected one million homes could be built along the route.

The report into growth also recommended a £3bn expressway road running between Oxford and Cambridge should follow a similar path to the rail link, favouring an option for improvements along the A34 to Bicester.

The Cowley Branch Line could also be opened by 2019 meaning rail passengers from Bicester could travel all the way to Oxford Science Park and Oxford Business Park by train, with just one change at Oxford station.

The report states: "East West Rail proposals include services between Milton Keynes and Aylesbury, via an upgrade of an existing freight line.

"Some changes to existing services and infrastructure could enable services to continue from East West Rail, via Aylesbury and into central London on the Chiltern line.

"Improvement could unlock major growth opportunities in the arc between Bicester and Bletchley."

It added that if the Expressway and East West Rail followed a similar route there would be: "The potential to grow to city-scale, ultimately supporting a population in the hundreds of thousands [between Bicester and Bletchley].

"This could be the first new town in over a generation."

Campaigners who had sought to ensure the Expressway did not run through southern Oxfordshire welcomed the news that it was more likely to follow a route near Bicester.

Peter Rutt, of the Expressway Action Group, said: "There is a lot to digest, but we particularly welcome the Commission’s findings that the Expressway route should be closely linked to the East-West Rail link.

"The report comments on the success of the new EWR Rail stations at Oxford Parkway and Bicester as an indication of the benefits that would flow from co-ordinating East-West Rail and the Expressway route, improving ‘first / last mile’ connectivity and reducing road congestion into Oxford and other cities and towns along the corridor."

It was expected that yesterday's Budget would unlock funding for many of the NIC's recommendations.

NIC chairman Lord Adonis said: “The arc spanning Cambridge, Milton Keynes and Oxford attracts the brightest and best from some of the most cutting edge industries.

"But the area also suffers from a lack of available homes and an infrastructure network that is feeling the strain – pricing local people out of the market, making it difficult for businesses to recruit staff, and threatening the future competitiveness of one of the most successful parts of the country."