The government body charged with building on the work of the Treasury’s private finance initiative taskforce was formally launched this week.

Treasury minister Andrew Smith, speaking at the launch of Partnerships UK, said one of its principal roles would be to advise public sector clients on markets in the private sector.

Smith said: “Public-private partnership is the cornerstone of government policy and the role of PUK will be to accelerate the number of deals.”

The Treasury has abandoned plans to allow Partnerships UK to take equity stakes in PFI construction schemes after complaints from the City and contractors that it would lead to conflicts of interest.

Partnerships UK chief executive James Stewart said: “Our sole purpose is to support the public sector. We will only put equity into a project if both the private sector investor and public sector client want us to.”

Partnerships UK will advise the public sector on PFI and PPP schemes in return for a fixed fee, payable at financial close or through royalties payable over the life of the contract.

The Treasury has earmarked £20m for the body, which will become privately owned in autumn. The government will retain a minority stake.

The work of Partnerships UK will be monitored by a government-appointed advisory council consisting of representatives from government departments and local authorities.

Keith Clarke, chairman of the Major Contractors Group, welcomed the launch.

“MCG member companies look forward to working with PUK in expanding the PPP market and in the development of new PFI products,” he said.