New businesses are being given help finding start-up space in industrial units costing £7m. The plans have been drawn up to cope with a shortage of space suitable for new enterprises in the city, with a focus on manufacturing.

The sites, close together in Bulwell, in Sellers Wood Drive and Milford Close, together provide a total of 27,000 sq ft. Another development is planned for the former Edgar Watson site in Radford Road, Hyson Green. It would offer a total of 30,000 sq ft split into seven different units.

Nottingham City Council and Nottingham Regeneration Ltd are behind the three projects and have hoping to secure funding from local and European sources, including the European Regional Development Fund and East Midlands Development Agency.

Alan Swales, chief executive of Nottingham Regeneration, said "There's definitely a shortage of space and there's clear demand for smallish units up to about 1,500 sq ft. It's just not viable for the private sector to build them because they won't get the return, and that exacerbates the problem of supply. "We want to target new local start-up businesses. Small and medium sized enterprises and the growth of those into bigger businesses are the lifeblood of manufacturing employment in the city. We might be shifting more and more towards the service sector but we can't afford to ignore things like manufacturing."

The city council will rent out the space to small firms, who can occupy between 550 and 5,000 sq ft.