A businessman has invested £1 million in a project to help emerging manufacturing businesses and rebuild industry in a coastal town.

Hugh Burnett has bought a 22,000sqft factory in Newhaven to provide rent-free space and facilities for young manufacturing ventures to flourish.

Newhaven, a once busy port and railway town, has suffered lately from unemployment and a one-way system which isolates the town centre.

But since 1996 the Government has ploughed money into its largest industrial estate, Avis Way, as part of efforts to improve and sustain economic development in the town.

Now the town's regeneration has been given a boost by Mr Barnett, who used to run Newhaven-based Cash Bases, a company making drawers for cash tills.

Mr Burnett has called his project Enterprise Works, a business "incubator scheme" where firms will be encouraged to work together and create a community atmosphere.

It is the only privately-funded initiative of its kind aimed at the manufacturing sector.

The first businesses are expected to move in at the beginning of next month. The factory in Beach Road Industrial Estate has room for 30 companies.

Mr Burnett said a positive cash flow was vital in the early stages of a business but that was only possible if people were able to make and sell their products.

He said: "If they are dealing with administration, VAT and accounts, they don't have the time to make what they want to make and so generate a profit.

"We are taking away all the bureaucracy. As they grow and develop they will, in turn, create new employment and also bring new skills to Newhaven."

Each business will be given administrative and technical support, including IT and secretarial help, business planning advice, accountancy and equipment maintenance.

And each will be appointed an experienced non-executive director acting as a mentor to grow and develop the business.

These directors will not charge any fees but will get a share of the proceeds when the company is successful. The various companies will share the running costs of the factory on an equal basis.

Mr Burnett said: "As Enterprise Works will not be making a profit, we will hold the costs as low as possible and they could be reduced even further if we attract Government grant aid."

Although manufacturing accounts for a sixth of the UK economy, it has suffered a sharp decline in recent years.

Mr Burnett said: "For manufacturing to be successful in this country, we need to be making bespoke products, rather than commodities.

"We can't compete with the Far East on mass production so we should specialise in tailor-made production and supply."