The UK Guarantees scheme will allow up to £40bn of funding to be underwritten for major infrastructure projects that have stalled because of the difficulty in securing finance.

The chancellor George Osborne, said he was using the coalition's "hard won fiscal credibility" to help release private sector funds.

The government will charge for finance for the projects, and those seeking the money will have to meet criteria to be include being able to begin work within 12 months. Those qualifying for the scheme will also have to prove the project will have a positive impact on economic growth, and provide good value for taxpayers.

The government said it hopes the first guarantees will be made in the autumn.

Treasury chief secretary Danny Alexander said, "The measures we're announcing today will help work get started on many important infrastructure projects and help our major exporters, providing lasting benefits for thousands of people and a significant boost to the economy."

Earlier this week the IMF cut its growth forecast , predicting the UK economy will grow by just 0.2 per cent this year.

This article originally appeared in economia.