Councillors are on the way to pumping cash into a business forum project which could see an extra £60,000 a year poured into regenerating Dartmouth's fragile economy.

The forum needs £41,000 to launch a year long investigation into whether the town could be designated as a national Business Improvement District.

It will culminate in a business vote over whether business are prepared to shell out extra one or 1.5 per cent on their existing business rate bills to pay for various regeneration projects – which could cover anything from extra street cleaning to funding free parking.

Last week the town council's finance committee agreed to recommend the town contributes £500 towards the year-long 'feasibility' study – which will involve formulating a business plan, sorting out how wide the new business district should be and consulting with the businesses and residents.

The forum has been promised £20,000 grant from the South Devon Costal Local Action Group, another £8,000 from South Hams Council and £2,500 from the county council's putting in £500 itself and applying to the Awards for All lottery for £9,500.

Forum chairman Paul Reach welcomed the council support as he said: 'The importance is not financial. The importance is more a commitment from the town council to support the BID process.'

He said if the BID area covered the whole town it would involve a total business rate of £4m a year – giving the BID scheme some £60,000 a year to invest in projects to improve the town's economy.

He also pointed out that if the BID business plan stacks up and it reaches a vote the result will be based on each of the individual businesses' rates bill.

If businesses representing more than 50 per cent of the total rates bill say yes then all the businesses will have to find the extra cash – like it or not.

Mr Reach said the town Sainsbury store shells out £600,000 a year in business rates on its own – which is some 25 per cent of the town's total business rates bill – so a Sainsbury 'yes' vote would be half way to the 50 per cent point.

Mr Reach told councillors at the moment the forum had no idea just what kind of support there is in the town for a BID project.

Cllr Robin Springett declared the request for council financial support was 'reasonable'.

Cllr Dave Cawley said: 'My business is unlikely to benefit from this but I would still be happy to pay the extra business rates. It's all about making Dartmouth a good place to live and it needs prosperity for that.'