Ministers want to launch a Defence Diversification Agency to help firms exploit advanced technology which is developed for military purposes.

The new agency will act as a kind of dating agency to broker contacts between civil companies and defence scientists.

Let's harness our defence skill, says George Robertson

Launching a white paper on the subject, Defence Secretary George Robertson said: "We want to use our world-beating defence skills to strengthen the UK's industrial base and help improve our economic performance.

"Whatever our views may be, we have to acknowledge that technological progress is often the result of military necessity."

The essence of the idea was bringing "good from military to mankind" he said.

The agency will be set up within the Defence Evaluation and Research Agency (DERA), which is responsible for Ministry of Defence research and development and has some 7,000 scientists working in it.

The DDA, with an estimated operating budget of about £2m a year from the defence budget, is set to begin operations by the New Year, employing probably no more than a dozen people.

'No subsidies'

Mr Robertson said: "We are not interested in constructing some huge and costly bureaucracy."

The white paper also disclosed the government had rejected suggestions that the agency should give the defence industry money to help it adjust to post-Cold War declining markets.

Mr Robertson said: "We're a broker and a catalyst, not a banker.

"For those with the initiative and capability to pick up and exploit good ideas it will be a very good mechanism indeed.

"The track record of failure in using military developments is so long that it is a pretty vivid reminder to everybody that there are chances which, if grasped, will provide healthy profits in future."

From battlefield to business

Mr Robertson went on: "We want to make sure that ideas that have been developed through military technology and the drive that comes from getting battlefield systems in place very quickly is utilised, but we are not in the business of subsidising industry.

"I am determined to derive maximum benefit from our substantial investment in advance technology for defence use, by getting that technology working for the wider economy."

Defence Minister John Spellar added as an example that while the Liquid Crystal Display was invented by defence scientists in Malvern, its civil applications were exploited in Japan.

The new agency will be overseen by a Defence Diversification Council comprising representatives from industry, trade unions and central and local government to offer strategic guidance to the agency and advice to Mr Robertson. It will be chaired by an industrialist.