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Private sector companies are being encouraged to help Derbyshire and Nottinghamshire compete for £1bn of government regeneration cash. The Derbyshire and Nottinghamshire Chamber of Commerce says it has seen a "leaked memo" which states that private sector bids for the new Regional Growth Fund are more likely to succeed than bids from local authorities and other public sector organisations.

The document, allegedly drawn up at a London meeting in September between the Alliance Secretariat and civil servants from the Department for Business, Innovation and Skills (BIS), includes a guidance note on the Regional Growth Fund.

The £1bn scheme is set to be introduced to provide financial support to plans which increase investment, jobs and growth in their area. The government has axed the country’s nine regional development agencies, which will be replaced by Local Enterprise Partnerships (LEPs).

The chamber says that the note from BIS appears to set a number of stringent guidelines about which organisations can bid for the cash. It says that the note says public sector-only bids would "get nowhere", while LEP bids with only a "window-dressing private sector endorsement" would be "unlikely to succeed".

It goes on to say that genuine public-private sector partnership bids would be “very welcome”, as would private sector-only bids. This would also include private-public bids including universities, according to the chamber.

George Cowcher, chief executive of the Derbyshire and Nottinghamshire Chamber, said: “Given the clear indication that Regional Growth Fund cash will only be allocated to projects which are genuinely business-led, it is vital that local firms and their public sector partners act quickly to develop and submit their bids for funding.

“With government austerity measures starting to bite and deep cuts expected in the spending review later this month, future funding for business support is likely to be extremely scarce, so it’s important that we bid for our share of this cash before it is allocated to other areas of the UK."

A spokesman for BIS would not confirm any of details from the "leaked memo". She said: "We will be saying more about the Regional Growth Fund in a white paper to be published at the end of the month. Proposals will be considered on their own merit."