Entrepreneurs can apply for part of the total £1 million prize on offer through the initiative, titled the Tech City Launchpad, which aims to support the east London tech community around Old St and Shoreditch, known as Silicon Roundabout.

The Technology Strategy Board will run the competition, which asks participants to create a two-minute video submission outlining their business ideas. A board of community and expert industry members will assess the applications and about 20 projects will be invited to submit written proposals. Ten will win up to £100,000 funding each.

Board chief executive Iain Gray says the funding should help the businesses attract further investment. The board will help winning entries find match funding needed to deliver their project ideas by holding workshops involving potential investors such as business angels and venture capitalists.

Applicants may apply from outside the area, which the government has named as Tech City; however, priority will be given initially to local businesses. If the scheme proves successful, it may be rolled-out to other industries and parts of the country.

Universities and Science Minister David Willetts Minister comments, ‘It is important that we nurture clusters such as the one that has grown up in this area.  They are the crucibles where new industries are born, where communities support one another and where companies grow to become globally competitive.

‘This initiative, with strong community involvement and including coordinated help to enable the companies to move fast towards commercialisation, is exactly what clusters need.’

Elizabeth Varley, co-founder and chief executive of TechHub, a space that brings together the technology community, adds, ‘This initiative is ideal for small and micro companies and start-ups in the Tech City cluster, which often struggle for capital or easy access to finance.  That successful applicants will be supported in attracting match funding is an important part of this project.’

The contest will open on 6 May and winners to be announced later in the month.