A £1bn flagship innovation fund unveiled by Gordon Brown in June is unlikely to start lending money before next year, it emerged on Tuesday. Officials also revealed that the Treasury has agreed a provision of only £400m to cover a £2.3bn package of support for the car industry announced in January.

The top civil servant in the Department for Business admitted to MPs that state initiatives to help companies weather the recession had proved a “mixed bag”. Simon Fraser, permanent secretary at the department, told the business committee the schemes had been put together “with some speed” in “very acute circumstances”.