The BBC's Adrian Pitches: "An early Christmas present for England's mining communities"

The new cash will be accompanied by a £3bn sum which over the next three years will be received by local authorities with coalfield areas.

Wales and Scotland are not included in the scheme and Plaid Cymru, the Party of Wales, has been quick to criticise the scheme.

Industry Correspondent Stephen Evans: "In Wales and Scotland there is concern"

The party's National Assembly candidate for the former mining area of Cynon Valley, Pauline Jarman, accused the government of stealing miners' pensions to fund the regeneration.

Announcing the measures at the Coalfields Conference in Peterlee, County Durham, Deputy Prime Minister John Prescott said the money would help build a new future for communities blighted by pit closures.

John Prescott...'building a new future'

The new money comes in the wake of a report by the Coalfields Taskforce, which was set up by Mr Prescott last year.

He said: "What I am announcing today is a co-ordinated government response to combat the deprivation now faced by communities who once gave dedicated service to this country's coal industry.

'First step along the road'

"It is a long term, 10-year plus programme and today is just one step along the road."

Mr Prescott said over the next three years the government would be investing £3bn, including £1.4bn on employment and training, £750m on housing and £900m on regeneration in local authority coalfield areas.

In addition Mr Prescott announced on Tuesday there would be £350m of dedicated money for the coalfields, including £45m for a new Coalfields Regeneration Trust, £15m for a new Enterprise Fund, £28m for housing and £196m for English Partnerships' coalfield programme.

Only English towns will benefit

Mr Prescott added: "It is not just about money. It is about working together in partnership, each of us for the good of the communities.

'Reverse years of damage'

"We are seeking to repair the damage done by sudden pit closures."

Under the previous government dozens of pits were closed - in 1985 following the National Union of Miners' defeat in the miners' strike and in 1992 as the "dash for gas" further cut power stations' demand for coal.

Mr Prescott said he would be bringing everybody involved in the programme together again next year to assess its progress.

The taskforce's recommendations have been considered for the past five months by Mr Prescott, Trade Secretary Peter Mandelson, Culture Secretary Chris Smith and Education and Employment Secretary David Blunkett.

In a foreword to the report, they said the government wanted to repair the "damage" done to coalfield communities over the past 20 years.

The government said it was setting aside £15m to invest in the Enterprise Fund, with the aim of creating a £50m fund by attracting private sector investment.

Workforce has shrunk

Pension funds, including those in the coal industry, will be invited to invest in the fund.

The Chairman of the Coalfield Communities Campaign (CCC), Bill Flanagan said: "We hope this marks the start of a great leap forward for former pit communities."

Mining areas have been badly hit by pit closures and the industry's workforce has shrunk from 200,000 to 10,000 since 1981.

Two-fifths of households in coalfield communities have no wage earners.