Cameron wants East London to rival hi-tech Silicon Valley

The Prime Minister said there was "overwhelming" interest from top international firms and investors in the planned East London Tech City.

Encompassing the Olympic Village and the East End, it has already attracted commitments to invest from companies including Facebook and Google.

The initiative was announced by Mr Cameron as Ministers faced growing anger over public spending cuts, which are expected to cost 610,000 public sector jobs by 2015.

The Government is eager to demonstrate how it believes the private sector can create jobs to compensate. In a speech to entrepreneurs and investors yesterday, Mr Cameron said that the East End of London would be transformed into one of the "world's great technology centres".

"We're not just going to back the big businesses of today, we're going to back the big businesses of tomorrow," he said.

"We are firmly on the side of the high-growth, highly innovative companies of the future. Don't doubt our ambition.

"Right now, Silicon Valley is the leading place in the world for hi-tech growth and innovation.

"But there's no reason why it has to be so predominant. Question is: where will its challengers be? Bangalore? Hefei? Moscow?

"My argument today is that if we have the confidence to really go for it and the understanding of what it takes, London could be one of them. All the elements are here.

"Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make East London one of the world's great technology centres."

Mr Cameron acknowledged that the development of a creative powerhouse in the East End would not "happen overnight".

But he said the response from international technology firms and venture capitalists to the Government's proposals had already been "overwhelming".

Companies planning to invest in the area include Google, Facebook, Cisco, Intel and British Telecom.

The Olympic Legacy Company is to provide office space while Silicon Valley Bank is to become a fully-fledged UK bank to provide finance to high-technology firms. Barclays will set up a new facility in the area and offer specialist banking services.