A DCLG spokesman said that funding for existing Local Enterprise Growth Initiative (LEGI) projects would continue, but that there would be no new funding rounds.

LEGI which was set up in 2005, was designed to prevent business failure and attract investment into poorer areas and has seen some large grants awarded to town and cities in the UK e.g. £77m to Croydon.

Since 2005, there have been only two rounds of funding, with £300 million allocated to 20 councils for schemes running up to March 2008 but the recent Comprehensive Spending Review (CSR) contained no details of future LEGI funding round and its demise was assumed to be a done deal. DCLG has now confirmed this.

Last week, the DCLG also said that it was setting up a £2 billion fund for neighbourhood and local renewal, part of which will be a new Working Neighbourhoods Fund which used to be called the Neighbourhood Renewal Fund.