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Page last updated at 19:05 GMT, Friday, 16 July 2010 20:05 UK

EU Funding roller-coaster

Pile of money
600 million funding pot at stake

Business leaders across the region have been on something of a roller-coaster ride this week.

On Monday there were fears that major projects expected to go ahead could be stopped by a government block on EU funding.

It was reported that thousands of jobs could also be affected with the loss of funding worth more than £600 million.

But then, on Thursday night, it was reported that the funding tap was back on!

So has the government done something of a U-turn?

It's now around 10 days since the Regional Development Agency announced it had been told by government to freeze applications for money from the European Regional Development Fund.

On Monday the RDA spokesperson, Suzanne Bond, told the BBC:

"We received the notification through an email from the government.

"I have been working with the government urgently this morning to seek further clarification of the precise nature of what the proposal is and to make the case for this funding to be unfrozen as soon as possible.

"It is truly critical for the South West economy."

On Thursday afternoon the funding freeze was raised in the Commons.

The Liberal Democrat MP for St Ives, Andrew George, told the House:

"The South West Regional Development Agency, which is due to be abolished, has this week announced the halting of vital economic development projects in the European Convergence programme in Cornwall, in spite of the fact that no UK Exchequer money was required for those projects to proceed."

A few hours later, after an apparent u-turn from the government, Andrew George told the BBC the funding commitment was in no doubt, blaming the RDA for the confusion.

He said: "I don't think there was any need for the RDA to interpret the Treasury advice in such a hard and precipitous way."

In a statement released on the same day the Government said the future of the European Regional Development Fund had never been in doubt.

But on Friday a Government letter sent to the Regional Development Agency acknowledged there had been some speculation.

Crucially it said that funding projects can be approved providing they meet four criteria. This guidance stops the RDA from making match funding commitments beyond this financial year.

It means major projects like the £100 million roll out of high speed broadband in Cornwall are back on track.

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