A £40 million initiative to promote enterprise in disadvantaged areas has been welcomed by Gordon Brown.

The new funds are designed to increase access to finance for local entrepreneurs in poorer areas.

The Bridges Community Development Venture Funds will be backed with £20 million of public funds, with the same amount coming from private investors.

Launched on Tuesday, the fund will only invest in businesses that will regenerate local economies in the most deprived areas of England.

Speaking at a Downing Street event for investors, the chancellor said "too many people are left out" of British economic success.

"Even at a time of record investment in start-up businesses by venture capital, we can and must do better," he said.

"The key to neighbourhood renewal is not more benefit offices but more businesses, which is why these new funds are crucial to openingup opportunities and encouraging and rewarding enterprise."

Trade and industry secretary, Patricia Hewitt, also welcomed the new funding.

"These new funds will enable entrepreneurs in deprived areas to maximise access to all of the opportunities that the UK economy presents," she said.

The funds will be run as commercial operations by professional venture capitalists and will look to provide capital to businesses that will be successful and grow strongly.