TWO hundred jobs are set to be created in a £2million project to attract new small businesses to Blackburn.

Councillors have given their backing to a proposal which will transform a derelict piece of land into a 35,000 sq ft site for up-and-coming firms.

Bids are now being made for cash to support the scheme, with a report to Blackburn with Darwen Council stating that it is confident they will be treated 'favourably.' Two acres of land off Furthergate and Harwood Street, originally designated for a dual carriageway connection between the town centre and the M65 at Whitebirk, will be used for the scheme.

The radial link road project was scrapped after it failed to secure Government money, and the council concentrated on developing its orbital route.

Around 200 jobs would be created by firms basing themselves in the 'managed workspace' complex.

The council has successfully created other managed workspace centres -- which remain in council ownership and tend to have shared receptions -- elsewhere in the borough. Approval has been given for the latest scheme by Blackburn with Darwen Council's executive board and it is anticipated that it will be completed by the middle of 2004.

Coun Andy Kay, executive member for regeneration, said: "There is a shortage of managed workspace to accommodate new and embryonic businesses in the borough.

"The council's existing centres at Greenbank, Eanam Wharf and Shadsworth are all full, or almost full."

The council already has access to European money to fund part of the scheme, with the rest expected to come from the North West Development Agency.

Coun Kay added: "That scheme has been abandoned and provides development opportunities in a prominent location.

"Funding will help create a building of higher architectural standard, in line with the Government's drive to create better public buildings from the use of public money."

Organisations such as Blackburn College and the Guardian Angels -- which provides business advice from established firms to up-and-coming entrepreneurs -- will be encouraged to have bases in the new buildings.

Detailed planning applications will now be drawn up.

The scheme is one of the first to come forward as part of the East Lancashire Gateway Project, announced over a year ago and backed by £7million of European money.

The Gateway covers 277 hectares of land straddling the Hyndburn/Blackburn with Darwen border around junction six of the M65.

A spokesman for the East Lancashire Partnership, which is made up of various organisations with an interest in regenerating East Lancashire, said: "Projects like this are key to widening the scope of employment in the area.

"They attract new investment, new businesses and give people an alternative location for their business away from the M62 axis.

"It is an excellent project which will have many benefits for the area as a whole."