A SCHEME to back start-up businesses is pumping millions of pounds into the local economy.

Now other towns and cities are copying the winning formula of the Huddersfield Business Generator.

HBG has helped set up more than 130 firms since it was formed less than four years ago.

Member firms employing a total of more than 200 people are landing domestic and international contracts worth up to £20m a year.

The figures make HBG one of Huddersfield's biggest enterprises - with turnover and employment levels on a par with many major stock market-listed groups.

Member firms include Budget EDI, which is supplying electronic payment technology to supermarkets Somerfield and Kwiksave, and Volume Products, which has found a market in the Middle East for its innovative portable office.

HBG, based at the Media Centre in Northumberland Street, was the brainchild of John Thompson, professor of entrepreneurship at Huddersfield University.

He hit on the idea as a way to encourage new graduates to stay in the town to set up businesses rather than go elsewhere.

HBG manager John Edmonds said: "The project takes raw entrepreneurial-minded graduates with high levels of skill but little business experience, or people with an enterprising business idea and `hand-holds' them for their first 18 months in business."

Mr Edmonds said HBG was providing the model for similar projects now being developed in Barnsley, Halifax and Oldham, among other places.

HBG supports businesses connected to the creative industries.

They include graphic designers, website designers, theatre and dance companies, film and TV producers, recruitment agencies, marketing consultancies and a language school.

HBG, which receives funding from the European Union, provides low-cost office space and administrative services as well as running regular sessions to help fledgling firms in business planning and marketing.