Chancellor George Osborne has outlined ambitious plans that will see tech clusters in the north of England joined up by a third high-speed rail network (HS3) between Leeds and Manchester.

Osborne's speech at the Museum of Science and Industry in Manchester at the start of the week came as the government seeks to address concerns that the economic recovery is failing to be felt beyond Greater London. 

The chancellor said that improved rail and road connections between cities such as Liverpool, Manchester and Leeds would help the north of England to compete with London. 

Osborne said he wants to join up cities with well established universities, often excelling in tech research. 

"Durham, Lancaster, Leeds, Liverpool, Manchester, Newcastle, Sheffield and York and more – the north is blessed with world class universities," he said. "We want to see science here turned into products here - and into jobs and growth here."

Osborne said that the cities of the north are individually strong but "collectively not strong enough".

"We need a Northern Powerhouse," he said. "Not one city, but a collection of northern cities - sufficiently close to each other that combined they can take on the world.

"Cities are also where clusters of successful industry are created - like the financial services cluster in London, or the digital economy of California's Silicon Valley.

"Not so long ago, people thought that the internet might make physical location less important. But it seems in the modern knowledge economy businesses and entrepreneurial types want to flock together more than ever. To form clusters where they can learn from and spark off each other." 

According to the BBC, a direct train from Manchester to Leeds currently takes approximately 49 minutes, but an upgrade to existing rail infrastructure across the Pennines could cut this to half an hour. The line could eventually be extended to Liverpool and Sheffield.

The chancellor said HS3 could cost as much as £7 billion, adding that it could be cheaper if existing rail lines were updated.

He argued that the building of the east-west link should be considered as part of a review into the second phase of the £50 billion HS2 high-speed rail project.

The first phase of the high-speed rail project will link London to Birmingham, while the second was due to connect Birmingham with Manchester and Leeds.

Finally, Osborne said it's unhealthy if the powerhouse of London continues to increasingly dominate the UK economy.

"We need an ambitious plan to make the cities and towns here in this northern belt radically more connected from east to west - to create the equivalent of travelling around a single global city.

"I want us to start thinking about whether to build a new high-speed rail connection east-west from Manchester to Leeds."

The announcement is likely to come as good news to the taxpayer-funded Tech City UK organisation, which is aiming to link 13 tech clusters around the UK with London.