TORONTO — Winnipeg could have an extra $25 million for roads and transit next year if Ottawa agrees to a new-deal strategy hatched yesterday by Canada's big-city mayors.

The new money could revive the city's nearly dead rapid transit plans, said Winnipeg Mayor Sam Katz.

Katz joined the leaders of Canada's nine biggest cities in Toronto yesterday to hammer out a formula for sharing the federal fuel tax, the first part of a new deal to revitalize urban centres.

The mayors hope their formula, along with a few compromises, entices the federal government to the negociating table in the coming weeks so that $1.25 billion can be made available to cities next year.

"Infrastructure and transit would be the priorities at this stage of the game," said Katz of Winnipeg's share of the cash.

When Katz announced last week that he plannedc to spend millions previously earmarked for rapid transit on community clubs instead, he also suggested rapid transit could be built once the city won a new deal.

"Thaqt is one of the possibilities," said Katz after yesterday's meeting. "If this comes to fruition as quickly as we hope, that's definitely one of the possibilities."

The extra cash from the federal gas tax could also be added to the existing road repair budget or used for new projects such as widening Kenaston Boulevard.

The mayors are now turning their attention to October's throne speech, in which Prime Minister Paul Martin is expecting to reveal how much of the federal gas tax revenue will be flowing to cities in 2005.

The Liberals have promised to share $2 billion from the gas tax with cities in the next five years, but it's unclear how much money will begin flowing next year.

Yesterday, the mayors stepped back from their long-established demand for five cents per litre next year, about half of what the federal government collects in tax on each litre. Instead they are asking for 2.5 cents, or $1.25 billion, with the balance by 2007.

"It's an effort to be realistic and establish a plan that will actually succeed," said Toronto Mayor David Miller, who chaired the meeting.

The full five cents would give Winnipeg between $50 and $60 million every year, though the city's infrastructure backlog would cost about $1 billion.

The mayors also proposed a formula to divide gas-tax revenue among the provinces, which would then funnel the money down to the cities.

The first 75 per cent of funding would reflect fuel consumption, so the more citizens pay at the pump, the more their cities get to keep.

The final 25 per cent would be based on transit ridership.

The big city mayors have long been worried the fuel tax will be spread too thinly among small towns and big cities.

Since only big cities have transit systems, the 25 per cent is a method of guaranteeing a bigger portion of the gas tax is dedicated to cities than to smaller municipalities.

"It's a simple way for the federal government to proceed, which hopefully removes obstacles so we can see the money flowing as soon as possible," Miller said of the formula.

The mayors also agreed that 25 per cent of their gas-tax revenue should be devoted to transit. If Ottawa agrees, that would funnel several million dollars into Winnipeg's transit system.

John Godfrey, secretary of state for cities, spoke to the mayors Friday night, saying cities are now the federal government's top priority.

"We are going to be working with the provinces to get as many deals as we can," Godfrey told the mayors. "It's our turn now."

But he hinted Friday night that Ottawa favours a slow ramp-up of the money over five years instead of the three the mayors are now demanding.

The Ontario government recently promised to transfer part of the provincial gas tax to cities to spend on public transit. Starting next month, one cent will begin flowing to cities such as Toronto and Ottawa, increasing to two cents in two years.

That mirrors a similar request made by Winnipeg city council of Manitoba Premier Gary Doer earlier this year, a request that would see the province share six cents a litre from its provincial gas tax with Winnipeg.

That would give Winnipeg an extra $66 million to spend on roads and transit, but the request is on the back burner.

Katz said he hasn't met with the province on the request, adding that getting a share of the fuel tax is his priority.

"This is the one we want to move ahead," said Katz.