Manchester has been regenerated since an IRA bomb in 1996

The city is the country's "boom town" and has also outstripped its northern rivals, Liverpool and Leeds, according to Management Today magazine.

It cites booming housing, property, retail, leisure and professional services sectors as evidence.

Improved US air links have also boosted its image, the magazine said.

"Manchester is improving at a really rapid rate and feeling more international than Birmingham," the magazine's editor Matthew Gwyther said.

"The airport means it's becoming a real international hub to the Middle East and the States and I don't think that applies to Birmingham.

We do want to compete with successful European regional capitals like Barcelona, Lyons, Glasgow and Frankfurt Howard Bernstein Chief executive Manchester City Council

"If you were to ask international businessmen which city they preferred many would opt for Manchester.

"It's certainly giving Birmingham a really hard run for its money to get to that second spot, if it hasn't already."

Manchester's regeneration is widely ascribed to a rebuilding programme which followed the damage caused to the city centre by an IRA bomb in 1996.

The 2002 Commonwealth Games also improved its international fame, which is also boosted by the commercial success of Manchester United.

University of Manchester, which is the biggest in the UK, and the city's success in overcoming negative headlines associated with a violent gang war in the 1990s were also praised.

Birmingham boasts nearly one million inhabitants

But, with the 2001 census recording its population as 392,819, it is much smaller than Birmingham which boasts nearly one million inhabitants.

The West Midlands city has also enjoyed a regeneration in recent years, based around its canal network and the opening of the recent Bullring shopping centre, which features an outlandish Selfridges building.

Manchester City Council's chief executive, Howard Bernstein, said: "We're not trying to compete with London, which is out on its own and long may it remain so.