Third of government's new investment fund to target clean tech

A third of the government's new £750m strategic investment fund has been earmarked for low carbon businesses and technologies, such as low emission vehicles, nuclear power and renewable energy.

The fund, which was announced in today's budget, will be distributed over the next two years with £400m made available during 2009/10 and a further £350m during 2010/11.

A total of £250m will be earmarked for specific green technologies and business models, with a further £50m provided for the technology Strategy Board and £10m going to UK Trade and Investment, both of which also provide support for clean tech firms.

Business Secretary Lord Mandelson said that "green, low carbon businesses and technologies will be a priority for the new fund", adding that the government was determined to ensure British business are "world leaders in the technologies and services the world will need as we use energy more efficiently and combat climate change".

The government said a further £300m will be available to operate a "tightly focused" car and van scrappage scheme that will come into effect next month and run until next month.

Under the controversial scheme, motorists trading in vehicles that are over 10 years old for a new model will receive £2,000. The government said the scheme will "remove older vehicles from the road and encourage consumers to buy newer, more environmentally friendly models". But green groups have been critical of the scheme, which they argue amounts to a bailout for the auto industry.