KTPs connect UK businesses with an academic or research organisation and a qualified graduate to work on innovation projects.

The funds will enable a significant expansion of the KTP programme.

The scheme currently has 630 graduates and post-doctoral researchers employed in KTPs in industrial research and development and entrepreneurial roles.

The extra funding comes from the government’s National Productivity Investment Fund, and will help to build the pipeline of the high-skilled research talent that is vital for an expanding innovation economy.

The majority of KTPs comprise SMEs, around 80% of all those that run.

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Jo Johnson, science minister, said: “Through Knowledge Transfer Partnerships, businesses of all sizes are partnering with our world-leading academics and researchers to learn how new skills and thinking can increase their competitiveness and productivity, and this extra funding will ensure even more UK businesses continue to innovate and grow.

“By putting science, research and innovation at the heart of our industrial strategy – and emphasising the benefits of commercialising research – we are building on our strengths in R&D and delivering benefits across the country.”

Ruth McKernan, chief executive of Innovate UK, said: “We are committing significantly more funding this year on KTPs.

“This enables an increase to the scheme, with additional KTPs becoming more closely aligned to Industrial Strategy Challenge Fund areas.

“Companies that have used KTPs know their development value in bringing in excellent staff with cutting-edge academic knowledge.

“The current tried-and-tested model is widely recognised – and proven over 40 years of operation – for its excellence in stimulating innovation and producing successful outcomes.”