GOVERNMENT money sought towards a £3.5 million scheme to build a new 30,000 sq ft bio-incubator at the University Science Park at York is "crucial for the development of the city."

That is the view of Prof Tony Robards, pro-vice chancellor for external relations at the University of York, who today unveiled the scheme as part of a £10.4 million building programme at the Science Park designed to meet the pressing demand for accommodation by high tech start-ups.

Prof Robards, who is chairman of York Science Park Ltd, is tensely awaiting the result of the York Science Park application to the regional development authority for a share in Department of Trade and Industry cash made available this year for business "incubators".

Not much is in the kitty. The DTI has just £15 million to play with. Shared between nine regional development authorities, Yorkshire Forward's allocation is just £1.6 million and if at all, York Science Park can expect only a proportion of this.

But it may yet be enough to put a bow on a finance deal which will allow for quick submission of detailed plans for a three storey bio-incubator right next door to the Science Park's existing Innovation Centre, which under the building plans is itself to be extended to include six new laboratories.

If the money is found, it will mean that an entire floor of the new three-storey bio-incubator would also be devoted to laboratories.

The stark demand for these laboratories was noted by Science Minister Lord Sainsbury when 18 months ago he visited the university of York.

It was that very concern which led Lord Sainsbury to set aside "incubator" money through the DTI.

Of 65 young science and technology-based companies on the inquiry list for working accommodation on York's Science Park, as many as 15 need laboratory space.

For that reason Harrison Construction has begun building an office extension to the Innovation Centre at the Science Park which will include six laboratories.

These should be ready by mid-January. It is also erecting four more free-standing buildings there to accommodate growing high tech firms.

Only the bio-incubator is yet to be funded and agreed.

Professor Robards said: "One of the problems about commercial development of bio-incubators is the uncertainty of return. Like a hotel it is not always in use. There are administration costs. Those using it are new enough to prefer short leases.

"But the shortfall is small enough to be covered by this DTI money and if we get clearance we hope to start work on it within six months because we need it within the next calendar year."

The result of the grant application should have been made known last month and is therefore imminent, he said, adding: "These are very tense times because in my view this is a very crucial development"