Tottenham Hotspur have moved a crucial step towards building a new stadium with a capacity of up to 60,000 on the site of their existing White Hart Lane home after reaching a new agreement with local government over the area's redevelopment.

After Haringey council promised to invest £9m into improvements to the public realm, to add to £18m already promised by the mayor of London towards regeneration in the area in the wake of the riots last summer, the club will now begin talks with banks and commercial partners regarding the scheme.

Following a failed bid to move into the Olympic Stadium, which resulted in a legal battle with the Olympic Park Legacy Company, the Spurs chairman, Daniel Levy, last month reiterated the north London club's desire to remain in Tottenham if agreement could be reached with local government. The club were delisted from the stock market in order to make financing talks more straightforward.

The £400m Northumberland development project includes the development of a new stadium plus the redevelopment of the surrounding area and new commercial premises including a supermarket, offices and residential properties.

"We have long said we could only invest in the area if we could see our commitment supported by others and that there was a real need to maximise the regeneration benefits and lift the wider area," Levy said on Tuesday. "We therefore see this as a commitment from the public sector to the Tottenham area and one which strengthens our ability to deliver a new stadium scheme with the potential to kickstart the long-term regeneration of north Tottenham."

Of the mayor's £18m investment, £6m will be spent via the council on highways, parking improvements and a district‑wide heating and power scheme. The rest will focus on public transport and infrastructure improvements, with £8.5m to be spent on a new public square that will link the new stadium to the proposed White Hart Lane station's ticket hall. Around £5m of Haringey's contribution will be spent on new "community event and public space" and £3m on improvements to existing buildings.

The riots in the area last summer focused the attention of the mayor and led to redoubled efforts to keep Spurs in the area. David Lammy, the Labour MP for Tottenham, said the agreement and an accompanying "memorandum of understanding" between Haringey and Spurs, were "excellent news".

"After all the twists and turns, this is a special moment for the community and fans that have fought so hard to keep the club in the place where it was born over 100 years ago," he said. "The club will now be able to go from strength to strength in a stadium fit for a club that will no doubt be consistently challenging for silverware at home and in Europe for decades to come."

Lammy, who campaigned hard against the plan to move Spurs to Stratford, added: "Whilst no one expects the new ground to be a silver bullet that will solve Tottenham's economic woes, this is certainly the most significant step yet to transform the area's future."

The Haringey council leader, Claire Kober, said: "We are investing in the regeneration of Tottenham and supporting Spurs' Northumberland development project because we know that together we can bring new employment opportunities to Tottenham, significantly improve the area and attract investment for a successful and sustainable future."

However, there is still a long way to go before work begins on the new ground that would ensure Spurs could consistently compete on an equal financial footing with their rivals for a Champions League spot by delivering the increased matchday income, commercial revenue and hospitality offering required.

The club have applied for planning permission for an amendment to their scheme for a new supermarket on the site, which could be the first part of the development to be built if permission is granted next month. Continuing attempts to find a naming-rights partner will also be redoubled and conversations with banks about the required financing are expected to step up a gear.

The announcement will also increase the pressure on the Olympic Park Legacy Company (OPLC) to deliver a workable future for the Olympic Stadium. With final bids due in before 23 March, West Ham United have a number of concerns about the process and are playing hardball over the negotiations in the knowledge that they represent the most attractive tenant. The OPLC continues to insist it can make the finances work without West Ham if necessary.