Money will be awarded to projects which draw in private sector cash, contribute to the overall economic health of the region, and provide wide-ranging regeneration, new infrastructure and jobs.
Mr Heseltine said: 'The first round of Regional Challenge competitions will be held later this year after the European Commission adopts the 'Single Programming Documents' which govern Structural Funds money. A second round will follow three years later'.
Mr Heseltine added:' In agreement with the Commission, prize money for Regional Challenge will amount to 10% of the European Regional Development Fund for each eligible area plus 10% of that sum from the area's European Social Fund allocation.
' Bids will need to satisfy the general criteria for Structural Fund assistance, and will be assessed against a number of additional criteria, to be finalised in the light of the consultations.
' They are likely to include: private sector leverage; comprehensive area-based regeneration effects; a significant contribution to regional competitiveness; strategic importance for the region as a whole; and contribution to several of the measures specified in the Single Programming Document', the minister added.