The Business Secretary laid out proposals for a business bank, which would tackle the gap in "long-term, patient capital for businesses".

He said: "The measure of the institution's success will not be the scale of its own direct interventions but how far it shakes up the market in business finance and helps to ease constraints for high-growth firms."

However, Mr Cable was unable to say how large the bank would be or when it would start operating.

In a speech at London's Imperial College yesterday, he said the bank could work with commercial banks such as the UK's Co-Operative Bank and the British operation of Swedish lender Handelsbanken.

He also explained how he planned to end the UK's laissez-faire industrial policy and replace it with one that involved Government intervention and partnership with business.

The Coalition would focus support on key sectors such as the car industry, aerospace and life sciences.

Meanwhile, Chinese telecoms giant Huawei is to invest an extra £1.2 billion in Britain, which would create more than 700 jobs during the next five years.