More than 11,000 women in the South East started their own business last year, official figures have revealed.

There are now 165,000 businesses in the region with a woman at the helm, according to the Office of National Statistics.

But women and equality minister Jacqui Smith claimed that still leaved a "vast amount of untapped potential".

The minister recently met some of the region's most successful female entrepreneurs.

They discussed ways to encourage more women into business, and covered a range of topics including childcare, finance and business support.

Among those at the meeting, which was hosted by the South East England Development Agency (Seeda), was Sussex-based entrepreneur Joanne Freer.

She is the co-founder of nappy company CottonBottoms, which was sold last year to Mayborn Group - the company behind Tommee Tippee baby accessories. Mrs Smith said people like Mrs Freer were role models but the number of women going into business still lagged behind other countries.

"Although women represent the largest under-represented group in terms of participation in enterprise, the increase in the South-East is among the best in the UK.

"The figures show there's still a vast amount of untapped potential in the region but help is needed for women to overcome barriers to setting up their own business."

The Government wants to increase the number of female-owned small businesses in the UK from 15 to 20 per cent by 2006. There are more than 600,000 businesses in the UK owned by women, generating between £50 billion and £70 billion.

Seeda chief executive Pam Alexander said: "Much of the wealth and dynamism of the South-East is based on the growth of new businesses, 28 per cent started by women. But this is below the national average, so there is clearly a huge opportunity to build on the potential for female entrepreneurship in the region."

Storrington-based CottonBottoms became a familiar name as the first "real nappy" brand on the High Street, selling in Boots, John Lewis and Woolworths. The company pioneered an easy-to-use, environmentally friendly cotton nappy and a franchised home delivery laundry service.

Mother-of-four Mrs Freer said: "The cost and inflexibilty of childcare is one of the biggest obstacles to women returning to work and starting their own businesses. I started CottonBottoms after my first child was born and used to take him with me everywhere but in other industries it would have been inappropriate.

"The Government is doing something about the cost of childcare through the family tax credit but perhaps there should be further tax breaks across the whole range of childcare."