LANCASTER University is to receive £500,000 to build links with local businesses, under a new Government scheme.

And the university intends to pump the money in to a long awaited new business and enterprise centre, similar to a successful scheme at Warwick University.

The move was welcomed by Pro-Vice Chancellor Richard Davies, who said: "As a world class university with academics who are well known internationally for their research, the University has been looking for ways to improve links and work more effectively with local businesses.

"We are delighted that, now, we have the funding to do this."

University chiefs also hope the scheme will encourage the establishment of high-tech companies with close links to the university.

The hope is that the companies will grow rapidly and create high salary jobs, encouraging graduates to stay in the city.

The cash boost was also welcomed by city MP Hilton Dawson. He said: "The assistance we are beginning to attract from Europe, from Government and from North West Region can unlock the potential that the University gives us to make Lancaster a centre for high-tech industrial development, retain more graduates in the city and provide sustainable jobs and opportunities for everyone."

A total of £22 million has been handed out to Universities and colleges nationwide, as part of the Government's 'Higher Education Reach-Out to Business and the Community' fund.