Speaking at the recent Trades Union Congress conference in Perth, first minister Alex Salmond revealed that the first steps have been taken to launch the scheme.

An award of £20 million in the Scottish Venture Fund has been made by the European Regional Development Fund, bringing the spending power of the project to a total of £150 million.

The initiative will bring together Scottish Enterprise’s Co-investment Fund, Venture Fund and Seed Fund to support business growth in the country.

Salmond commented: ‘The establishment of a Scottish investment bank will be a significant addition to the collaborative work, across government and industry, to strengthen Scotland’s economy, reputation and competitive edge.’

The minister also said that the project is just one part of the country’s plan to encourage economic growth, such as a £350 million accelerated capital spending drive and the establishment of an updated apprenticeship system.

Earlier this month, enterprise minister Jim Mather revealed that the Scottish Manufacturing Advisory Service will receive an £11 million investment over the next three years to help the sector recover by increasing its exports.