Britain to unveil help for infrastructure projects

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Up to £2bn is expected to be made available during 2009/10, managed by a dedicated team in the Treasury and going to projects that have been unable to raise all the funds they require from banks and private sources.

"The government will announce measures to support continued investment in public infrastructure in the face of constraints on private finance resulting from the credit crunch," the prime minister's spokesman told reporters.

In a separate statement, the government said it was bringing forward by one year almost a billion pounds of spending to improve the country's schools.

"I am today announcing that £919 million of capital spending on schools and children's play areas will be brought forward from 2010/2011 to 2009/10," Schools Secretary Ed Balls said in a statement. The credit crunch has frozen debt markets and made banks reluctant to lend, especially over long periods, meaning several privately-financed and operated infrastructure projects have stalled.

The government hopes the support measures will boost efforts to pull Britain out of its first recession since the early 1990s.

Britain's economy shrank by 1.5 percent in the three months to December, the sharpest decline since 1980, and is expected to contract for much of this year.

The construction sector has been hit particularly hard, resulting in thousands of job cuts.

While some infrastructure projects have been able to source all the funding they need, the government feels it has to act now to stem job losses.

The package is expected to be financed with unspent funds from government departments, rather than with any new borrowing.

The government has already launched a series of support measures to try to kick-start bank lending, including an offer to insure losses arising from risky assets and by injecting billions of pounds into the banking system.

It also announced a £20bn fiscal stimulus plan in November aimed at reducing the severity of the recession and speculation is growing that another stimulus could be on the way in the April budget.