As well as plans for HS3, Prime Minister David Cameron and chancellor George Osborne this week announced that a formal body would be set up with northern city-regions to help realise the project.
HS3 and the transport body are two key proposals in a report by High Speed Two (HS2) chairman Sir David Higgins last week (see panel).
Cameron said improving connectivity and cutting travel times is a "crucial part of our long-term economic plan for the north".
He said the body, Transport for the North (TfN), would work with the government on regional transport strategy, including options, costs and a timeframe for HS3. It would give its interim report in March, he added. The government said TfN would "allow the north to speak with one voice on the big decisions".
Higgins’ report stresses the need to improve connectivity between Leeds and Manchester as well as Hull, Liverpool, Newcastle and Sheffield.
It argues that HS3 would enable the north’s growing number of "knowledge-based" businesses – such as high-tech manufacturing, creative industries and finance – to flourish.
Higgins notes that Leeds and Greater Manchester are just 36 miles apart, but "less than one per cent of workers living in the cities commute in either direction each morning".
The report says Network Rail studies show that a high-speed link could cut Leeds–Manchester journey times from 55 minutes to between 26 and 34 minutes.
It adds that Network Rail looked at options including "a new, dedicated high-speed track involving the construction of a tunnel underneath the Pennines to an upgrade of the line using existing unused tunnels".
Higgins’ report comes after two other studies this month, by the City Growth Commission and the Centre for Cities think-tank, also called for improving northern city-regions’ rail connectivity to boost growth.
Commentators said HS3 could have major impacts on housing and regeneration across the north. Jeremy Hinds, Manchester-based planning director at consultancy Savills and head of its HS3 Working Group, said increased housing growth "must follow" any economic gains from the scheme.
Gary Halman, managing partner at Manchester-based consultancy HOW Planning, said HS3 could "open up entirely new housing markets across the region" by making it easier for people living in Leeds or Manchester to commute between the cities.
Halman said any refurbished or new stations could bring employment. But he warned that the economic case still has to be made on HS3’s broader regeneration benefits.
Hinds added: "We don’t have a planning structure that allows for the necessary collaboration across local authorities. One big challenge for planning is to create a framework that allows economic benefits to be shared fairly among the core cities."
Experts differ on the regime under which HS3 could gain planning consent, saying the proposals are still unclear but seem to include both constructing new lines and tunnels and upgrading the current network.
Angus Walker, a partner at law firm Bircham Dyson Bell, said the planning mechanism would depend on the quantity of new line. He pointed out that it would only qualify for the fast-track major infrastructure route for Nationally Significant Infrastructure Projects (NSIPs) if it was at least 2km. Otherwise a Transport and Works Act Order would be needed.
Robbie Owen, a partner at law firm Pinsent Masons, said the government might opt for a parliamentary hybrid bill, the method by which HS2 is being decided, "because of the scale of the proposal". He added that this presents less risk of a legal challenge during the bill process and fewer restrictions than the NSIP route.
But Hinds said the NSIP regime is "ideal" for such projects. He added: "HS3, unlike HS2, has widespread political support. You can see HS3 happening more quickly as a result."