The money, £2.4m from Yorkshire Forward and about £780,000 from Leeds Financial Services Initiative (LFSI), will be used to promote the financial and business services sector in the Leeds city region through the LFSI.

Money will be spent on creating eight new jobs at the LFSI, including a full-time chief executive and launching a London office to promote the region in the capital.

Part of the cash will be used to fund research into trends within the industry.

The LFSI aims to double its membership from 110 members over the next three years across the financial services sector, which employs 300,000 people in city region.

Kevin O'Connor, chairman of LFSI, said: "The LFSI has been very much an organisation with part-time volunteers and it has had to punch above its weight.

"We want to make sure we maintain our competitiveness within the financial services sector."

One of the areas in which it is looking to explore opportunities in the future is the Islamic financial services.

The LFSI will work in partnership with Yorkshire Forward to raise the profile of the sector, lobby on its behalf, help grow the existing market and encourage new investors.

It will also work with other agencies and partners across the city region, which stretches from York and the Craven area down to Barnsley in South Yorkshire, in particular York Professionals and Bradford Financial Services Initiative, to ensure the growth of the industry benefits the wider region.

Until now, the LFSI has focused most of its attention on the centre of Leeds.

Simon Hill, Yorkshire Forward's director of business, announced the new funding at a breakfast briefing in Leeds.

Government Ministers Rosie Winterton and Yvette Cooper also spoke of the funding as an example of support on offer to regional industries as they visited the region to find out more about how the current economic climate is affecting the region's businesses.

Mr Hill said: "The financial and professional services sector has experienced huge growth in the Leeds city region over the last decade and Leeds is now one of the biggest financial centres outside of London.

"It is also a vital link in the supply chain for other regional industries and is a significant asset for attracting inward investors.

"This is an innovative sector that knows how to do business, but by bringing together our investment commitment and the expertise of LFSI and other professional services bodies in the region, there are ways in which we can ensure it enjoys even greater success in the future."

Mr O'Connor added: "Leeds Financial Services already has good brand recognition and this initiative will enable us to better position the Leeds city region as a major European financial region and meet increased competition from other major centres within the UK and from overseas.

"Equally, there are also opportunities to attract businesses which we have been unable to adequately exploit until now and which we can add to the range of expertise available within the area."

He added: "There is some evidence that some of the other areas in the UK are putting a lot of resources into their own financial services competitiveness so there is a need to stay up and ahead of the game. Things can change very quickly and if we are not continually moving forward then we could start falling behind."


A HISTORY

LFSI was formed in 1993 as a partnership between Leeds City Council and Leeds Chamber of Commerce.

Funded by membership subscription and in-kind support generating approximately £100,000 per annum.

LFSI promotes the Leeds area as a financial services centre and the expertise of its businesses.

The financial and business services sector in Leeds city employs 124,000 with another 298,000 across the Leeds city region.