If North Yorkshire County Council's executive agrees to make the outline bids for Government funding tomorrow it will be in the knowledge that the authority would have to contribute 10 per cent or £12.5m from its own resources.

Predicted population growth in Harrogate and Knaresborough – already the largest urban area in North Yorkshire with 85,000 and another 20,000 living in surrounding villages – is expected to add to congestion.

Harrogate is a major attraction as a tourism, exhibition and conference centre and also generates high volumes of traffic in and out of Leeds and Bradford on commuter routes.

The local development framework, which is still being worked on, has identified the need for an additional 400 houses a year and Harrogate Council is planning to cater for this increase through urban extensions to the town.

North Yorkshire's director of business and environmental services, Richard Flinton, said: "These urban extensions would lead to increased demand for travel within the town and increased pressures on the internal highway network and passenger transport provision." Some improvements have been achieved through the Harrogate and Knaresborough integrated transport strategy, but Mr Flinton added: "It is considered that more significant improvements are necessary.

"Potential measures to be considered may include major highway schemes to remove traffic from the centre of Harrogate, strategic and local park and ride sites, bus and rail infrastructure improvements, as well as other demand management measures."

Mr Flinton, who said there was potential for attracting contributions from developers towards transport infrastructure improvements, added: "An appropriate level of funding at this very early stage is estimated to be in the region of £75m."

Although Malton and Norton were bypassed in the 1970s, they suffer significant traffic congestion problems, particularly at Butcher Corner and at the level crossing on the York to Scarborough railway line.

Mr Flinton said: "There is a major challenge to address congestion in Malton and Norton which is likely to be intensified by a possible significant and regular growth in the size of the urban area by up to 1,500 dwellings over the next 15 years.

"Potential measures could include new major highway infrastructures, including a new river crossing to the south west of Norton, highway improvements to the junctions with the A64 to better cater for travel patterns in the area as well as improvements to public transport interchange facilities and operation."

Mr Flinton estimates that it could cost in the region of £50m to improve the situation in Malton and Norton.

His officers have also looked at other congested sites across North Yorkshire, including Northallerton. Here the county council executive agreed in March, 2006, that a solution had to be found to problems associated with the Low Gates level crossing. One possibility is a northern link road which would avoid the crossing.

Councillors are being told that legal processes would have to be gone through if they agree to make an outline bid for the work in Harrogate and Knaresborough and Malton and Norton. These would include obtaining planning permission, land acquisitions, compulsory purchase orders and possible public inquiries.

Mr Flinton warned: "Both of these proposed transport packages, if approved, represent major construction projects with significant risks associated with issues such as cost overruns and the impact of delays beyond the control of the council."

But he is recommending that the outline bids should be made with a further report being brought back to the executive if they are endorsed by the regional transport board.