The federal government has drawn up a plan to reduce traffic congestion in Melbourne by widening a key freeway, backing the Metro Rail project and resurrecting the dumped East West Link toll road plan.

The federal environment minister, Greg Hunt, who has been given new responsibilities for cities, said a $200m plan to widen the Monash freeway by adding a third lane in each direction should get under way immediately.

Hunt also backed the Victorian government’s plan to build the cross-city Metro Rail project but, more controversially, maintained the Coalition’s support for the $6.8bm East West Link, a tunnel that would run across the northern suburbs of Melbourne.

Tony Abbott said the last Victorian election was a “referendum” on the East West Link plan. Voters duly elected Labor, which opposed the new road and has insisted its priority is urban rail and removing level crossings.

According to the East West Link’s business case, the road would have returned 45c for every dollar spent on it. It would have taken 56 years to pay off and actually increased congestion on some key Melbourne roads.

But Hunt said on Monday: “We will be absolutely committed to it. We can’t build it alone, the state owns the land and builds the roads, but you cannot stop what will inevitably be necessary.

“In the end, Melbourne needs a cross-city rail tunnel and a cross-city road tunnel, which is the East West Link, or else we will never resolve this problem of congestion.”

Hunt said the Victorian government had its “head in the sand” by refusing to build the East West Link. The environment minister also backs moving Melbourne’s container port to Geelong and Hastings to remove large trucks from Melbourne’s streets, and extending the M80 ring road.

The Victorian government reacted positively to Hunt’s plan. “Isn’t it absolutely refreshing that we can have not an argument, but have a bit of a discussion, a debate and a process around the share of funding?” said the premier, Daniel Andrews.

“That’s a real step forward over what’s been the case over these last 12 months.”

But the state government remains staunchly opposed to the idea of revisiting the East West Link.

Victoria’s treasurer, Tim Pallas, said: “If Mr Hunt wants to continue to reagitate issues that I think have long since passed and have been settled, he’ll spend a lot of time spinning his wheel.”