Deputy prime minister, Nick Clegg today confirmed the additional £1bn allocated to the Regional Growth Fund (RGF) would be split into at least two further bidding rounds.

Mr Clegg said the extra money, first announced in the chancellor's autumn statement last week, would be focused on creating jobs, galvanising private investment and supporting areas whose economies are dependent on the public sector.

With the next round set to open in February 2012, the deputy prime minister said cities would be encouraged to submit innovative projects building upon successful approaches adopted in earlier rounds.  He also confirmed Lord Heseltine and Sir Ian Wrigglesworth will remain as chair and deputy chair of the RGF's independent advisory panel.

Mr Clegg said: ‘This additional billion pound boost for British businesses means the Regional Growth Fund will create an estimated half a million jobs before the end of this parliament.

‘With this targeted support for companies we're unlocking private sector investment, with at least £5 put in for every £1 of public money.'

Since its launch in October 2010, the first two rounds of the Regional Growth Fund have allocated £1.4bn through two bidding rounds. Officials estimate the programme will support as many as 244,000 new and existing jobs.

More than half of the 50 projects winning a share of £450m available in the first round are up and running.  Some 126 projects are in the running to share £950m second round funding.

But Chuka Umunna, shadow business secretary accussed the Government of creating more losers than winners by failing to get growth going in the regions and holding areas back.

Mr Umunna commented: ‘Last week, the Government confirmed that they do not expect to complete the due diligence process for round one until the end of March 2012 – almost a year after the winners were initially unveiled.'