The UK government has welcomed Birmingham City owners Knighthead Capital’s £100m investment into Britain’s second city, which is centred around a 60,000-seat stadium.

The American advisory firm, in which NFL great Tom Brady owns a small stake, has spent the money on a 48-acre site near to Birmingham City’s St Andrew’s home for the mega-project.

Knighthead co-founder Tom Wagner said that the project would tap into Birmingham’s potential, with the sports quarter a “catalyst for regeneration”. 

Wagner also mentioned plans to dig a tunnel from Birmingham New Street station to the site, claiming “it could transport thousands of people an hour. We think it would cost roughly £20m.”

The project will focus on a 60,000-seat stadium but will also include commercial outlets and homes. It is projected to bring in 8,400 jobs and cost £3bn.

A new arena with 60,000 seats would dwarf city rivals Aston Villa’s 42,000-capacity Villa Park and add to a Knighthead portfolio which now includes the Edgbaston Hundred franchise Birmingham Phoenix, in which they purchased a 49 per cent stake for £40m last week.

Secretary of state for culture, media and sport, Lisa Nandy said: “The Birmingham Sports Quarter is an exciting venture that highlights how sport can be an important driver for regeneration and growth.

“Across the divisions, our professional football clubs are vital community assets at the heart of towns and cities around the country, so it is fantastic to see investment directly benefiting residents of Birmingham and the wider region.”

Business and trade secretary Jonathan Reynolds added that the region “is a powerhouse for investment” and that the new sports quarter “will not only play a vital role in bringing thousands of new jobs into the area but will put more money into the pockets of the local community”.