A £1million scheme set up by the former Michelin tyre plant to help businesses in Burnley has handed out its first grants.

The Michelin Development - Burnley Fund has been set up to counteract the loss of 452 jobs when Michelin closed its Burnley site in October 2001 after more than 40 years in the town.

It is hoped the fund will help businesses in the town and create new job opportunities. Almost all of the people who lost their jobs have since found new employment.

Since the plant closed down Michelin has been working with the North West Development Agency, Burnley Borough Council, Business Services East Lancashire and The Royal Bank of Scotland to identify the best ways of assisting businesses to counteract the loss of the jobs.

Newrap Ltd, based at Farrington Place, Rossendale Road Industrial Estate have been given a grant of £40,000 and BCW Engineering, based on the Smallshaw Industrial Estate received £20,000. Both grants will be used to employ more people and buy new machinery. Alex Jackson, managing director at Newrap, which makes packaging machinery, said: "As the first company in Burnley to apply for the grant, access to these funds has enabled us to create new employment and carry out trials on different processes."

Alec Cassie, partner at BCW Engineering, which makes products for the aerospace and car industry, said: "The fund will help us purchase assets needed to move the company forward and be competitive at the same time create new jobs for Burnley."

The fund is open to all businesses in the Burnley Borough Council area, or those relocating to the area. Anyone who wants to apply for a grant should call Burnley Enterprise on 01282 411320.