The scheme is designed to support grass roots organisations, and grants of as little as 250 pounds will be available for smaller groups.

The Community Development Foundation is running the three-year programme on behalf of the Cabinet Office.

The fund will be divided into an 80m pound small grants programme, and a 50m pound endowments programme. This is intended to allow local funders to get matched investment to place in endowments, increasing their ability to provide long-term funding.

Third sector minister Phil Hope said: "I want grass roots organisations in our communities to thrive so that they can help with the individual challenges that face each local community."