Gordon Brown has announced his attention to set up a new state-backed bank to address the funding gap for new start-up companies.

The Prime Minister said the proposed bank would, "provide the finance for more difficult and more risky start-ups for high-technology businesses of the future."

Richard Lambert, the head of the Confederation of British Industry, first put this proposal forward last month.

Mr Brown made the announcement while launching a report called ‘New Industry New Jobs', which said that government needed to recognise the impact that decisions on taxation and spending have on the development of British businesses.