The UK government is to pump £20 million into a new fund to help emerging hi-tech businesses succeed.

Secretary of State for Trade and Industry Stephen Byers yesterday announced the UK High Technology Fund.

Byers claims that, by next spring, UK financial institutions will inject a further £20 million, and that expected subsequent contributions from pension funds will generate an extra £85 million.

The fund will offer equity finance for small and medium hi-tech firms.

Launching the fund, Byers said: "Small high-tech companies often struggle to raise finance from traditional UK venture capital funds. This fund is aimed at them and will stimulate growth in this vital area of the economy."

Westport Private Equity has been appointed to act as fund manager.