Leicester is to receive a much needed boost to its ailing textile industry with the announcement of a new textile village, according to reports in the Leicester Mercury.

The village will house several smaller firms, providing them with access to top of the range machinery and hi-tech design and marketing services.

The £5m ($7.5m) funding for the village is being provided by the European Union, the Department of Trade and Industry, the East Midlands Regional Development Agency and local businesses.

With a further 200 textile workers losing their jobs in the Leicester area last week the proposal of the textile village will come as a welcome relief for textile companies in the area and future employees.

Councillors had expressed concerns about the village becoming a local sweatshop industry but were reassured by news that all the companies taking part would be involved with trade unions and would abide by strict labour  regulations.

A final decision has yet to be made on the final site for the village.