JIM Murphy has pledged to use new borrowing powers for Holyrood to pay for the unification of Scotland's rail network, if he becomes First Minister in 2016.

The Scottish Labour leader said that the long-awaited Crossrail project, which would enable services from the north and east of Scotland to continue through Glasgow to the west and south, was the "missing link" in the city's rail infrastructure.

The scheme, which has been mooted since the late 1960s, would see the creation of three new railway stations carrying up to four million passengers per year with costs estimated at up to £200 million. It would mean an end to the current situation, which sees the northern railway network terminate at Queen Street station and trains from the south end at Glasgow Central meaning passengers face a trek across the city to continue journeys. The link could be achieved by electrifying the little-used City Union Line and opening it to passenger services.

The East Renfrewshire MP, who revealed that funding the policy would be included in his party's 2016 Holyrood manifesto, said: "Crossrail would bring Scotland together, linking north, south, east and west. It would see Scotland finally have a unified rail network service. It would offer better transport for Glaswegians, more capacity on a rail network creaking at the seams and more jobs for the east of the city."

Strathclyde Partnership for Transport, which produced a report on crossrail in 2008, said the project could create up to 130 new jobs over 10 years while contributing £36m to Glasgow's economy.

The announcement came at a major summit examining potential devolution of tax-raising powers to cities across the UK.

At the event, Infrastructure Secretary Keith Brown announced a new £11 million fund to help Scotland's cities utilise "cutting edge technological infrastructure" in a bid to rival places including Barcelona and Amsterdam. "Smart cities are the future and we want to make sure our cities are equipped to deliver for their citizens and for Scotland," he said. "This means being smart about how we use data and technology to improve services, promote innovation and empower people and communities.

"European cities such as Barcelona and Amsterdam are leading the way with their 'smart agenda' and I am determined that our cities develop the cutting-edge technological infrastructure needed to compete internationally."

Mr Murphy also reiterated calls for an end to a perceived rivalry between Glasgow and Edinburgh, saying the two cities could to work together to create an economic powerhouse to compete with London. He has previously called for powers to be devolved to the Scottish Government through the Smith Commission to be passed on to local authorities.

The Labour leaders of Glasgow and Edinburgh City Councils, Gordon Matheson and Andrew Burns, are to produce a report on the project with the help of Andrew Adonis, the former UK Transport Secretary.

City leaders that attended the meeting launched a Modern Charter for Local Freedom, setting out the powers they believe cities and their regions need to improve lives and boost the economy.

Inverness Liberal Democrat MP and Chief Secretary to the Treasury Danny Alexander, who also spoke at the event, said greater devolution to cities and regions would boost growth.

He said: "I am one of those unusual breeds of politician who came into politics to give power away. My firm belief is in doing locally what is best done locally, regionally what is best done regionally, and nationally only what is best done at the national level. So my message is that our future is one of ever-greater devolution - ever-greater liberty - and ever-greater growth."

He added: "We have seen that the devolved model works. It incentivises smart decision making. It delivers the right projects for each area. It harnesses the expertise and enthusiasm of people who know their own area far more thoroughly than the career civil servant from Whitehall. It empowers cities to determine their own future."