Rail services across the north could be controlled by local authorities in the Greater Manchester Combined Authority under terms being discussed with Department for Transport.
GMCA is proposing to set up a franchisor body with neighbouring authorities in West Yorkshire and South Yorkshire, sharing financial risk and operational responsibilities.
The Northern and Transpennine franchises could be re-let by the new body as one franchise starting in 2014 or 2015.
Currently, local passenger transport executives such as Transport for Greater Manchester are co-signatories to the franchises but final decisions on specification and funding rest with DfT.
In a board paper to be put to the GMCA on Friday 25 May, TfGM managers Darren Kirkham and Stephen Clark describe an initial seven-year franchise, and argue that local control would enable services and budgets to take account of "new rail infrastructure such as the Northern Hub or electrification; rolling stock changes, related to electrification and replacement; Network Rail's decentralisation agenda".
Talks are likely to begin in the autumn with DfT over a financial settlement to pay for the significant running costs, currently met by DfT centrally. Discussions will also begin with authorities in Lancashire, Merseyside and the North East over integrating transport plans.
The report goes on: "Government has announced significant capital expenditure on the northern rail network over the next seven years, notably in the form of electrification and elements of the Northern Hub scheme. These improvements will deliver significant capacity enhancements and devolution is intended to allow parties the ability to influence how that capacity is best utilised in support of our economic objectives. Securing a franchise of seven years in length will allow the full financial implications of the capacity enhancements to be established and may then put all parties in a stronger position to determine the benefit of a longer franchise of up to 15 years once this period of significant change of the railway is concluded."
GMCA said £1bn of capital work is planned for the next seven years directly in rail infrastructure in the north of England. Projects include the Northern Hub capacity expansion, Lancashire electrification and the Transpennine electrification.