Speaking at the launch in Edinburgh, Lord James said: 'The Cycle Challenge is a one year initiative and will provide a total of 500,000 to pump prime innovative, local projects which demonstrate their effectiveness in either getting people back on their bikes or to take up cycling for the first time.
'This seeks to build on several other recent Scottish Office cycling policy initiatives by making it easier for people to cycle.
'The more people we have cycling the more we help the environment and the more people we have participating in a healthy pastime.
'The successful projects will be announced by the end of December 1997, which will give the successful bidders time to organise their work. Payments will made between April 1998 to March 1999.
'I am confident that progress made as a result of this competition will assist local authorities in achieving the national targets to increase cycle use, as set out in the Government's National Cycle Strategy.
'The National Cycling Forum, which met for the first time in November, is also looking at ways to take forward the conclusions of the National Cycling Strategy.
'The findings of this Forum, along with the continuing work of the Scottish Cycling Forum, will help all parties with an interest in cycling to further their aims in increasing cycle use.'