£45m boost as Rolls-Royce revs up drive to develop cleaner engine

The funding will allow for partnerships to be set up between Rolls-Royce and a number of universities, Business Secretary Peter Mandelson said.

Projects will include developing lighter fans, which reduce fuel consumption, simulation technology for virtual engineering and high-temperature alloys to improve fuel efficiency.

Rolls-Royce said it would work in partnership with universities in Birmingham, Bristol, Cambridge, Imperial College London, Loughborough, Nottingham, Oxford, Southampton, Surrey and Swansea.

Lord Mandelson also welcomed a commitment by Rolls-Royce to build a new aero engine disc facility in Sunderland.

He said: "The knowledge, skills and high-end production the UK offers give us huge opportunities to benefit as global demand for low-carbon products grows. These new projects will help our world-class aerospace industry to meet that growing demand."

Ric Parker, director of research and technology at Rolls-Royce, said: "This is a good example of government, industry and academia coming together to expand Britain's capabilities in high value-added manufacturing."

The disc facility is one of four new facilities Rolls-Royce is to build in the UK, which will secure or create 800 jobs.

The news came as figures showed that British manufacturers enjoyed a solid end to the year, but business leaders warned that the sector's access to finance must be improved to ensure a sustained recovery.

Official figures showed manufacturing output grew by 0.9 per cent in December, from an upwardly revised 0.2 per cent in November, three times faster than economists had forecast.

However, the end-of-year surge failed to prevent the manufacturing sector from recording its worst year since records began in 1948, with output sliding 10.5 per cent in 2009.