More investment to promote innovation and harness business-led growth in the South East has been agreed by the Government.

The Comprehensive Spending Review has been welcomed by Allan Willett, chairman of the South East England Development Agency (SEEDA).

He pledged the agency would use the additional resources to deliver lasting economic benefits to the region and the nation.

Mr Willlett received the good news at a breakfast meeting at No 11 Downing Street, attended by Deputy Prime Minister John Prescott, Chancellor of the Exchequer Gordon Brown and other ministers.

Nationally, budgets for regional development agencies (RDAs) will increase over the next three years by 40 per cent - from £1.2 billion this year to £1.7 billion in 2003/4.

This will give each of the RDAS, including SEEDA, investment funding and greater flexibility as to how the resources are spent.

The objective, according to Mr Brown, is to "strengthen regional economies and promote economic development and social renewal".

Expressing the Government's absolute confidence in the RDAs, Mr Prescott said: "The job of the RDAs is to get the regions firing on all cylinders.

"They have got off to a good start and I want to build on their success."

He said the RDAs had come out of the spending review "as the strategic leaders of economic development and regeneration of the regions".

Following the high-level meeting at Downing Street, Mr Willett, who is also the RDAs' national chairman for innovation, enterprise and competitiveness, said: "This is excellent news for the South East.

"It shows the Government is willing to invest in a successful region to ensure we continue to be the engine of the UK economy."

He said SEEDA was at the heart of the economic strategy for the South East and the Deputy Prime Minister and the Chancellor had made clear they regard SEEDA as the driver for growth in the region.

Mr Willett said: "We are greatly encouraged by their pledge on funding for innovation and enterprise, especially the creation of high-tech industry clusters in our region.

"We are now better equipped to move these key elements forward."

Mr Willett added that although SEEDA was "still looking at the fineprint", the figures in the Comprehensive Spending Review were very good.

He said: "It is essential that SEEDA is given long-term backing and the ability to meet specific local priorities."