The expansion of university towns, such as Cambridge and Edinburgh is one of the ideas under consideration in a government review chaired by Sir John Egan.
A taskforce headed by the CBI chairman is understood to have looked at the idea of promoting regional champions for areas and devising so-called "prosperity plans" to ensure that communities are sustainable with proper employment, hospitals and leisure facilities.

Egan was appointed by deputy prime minister John Prescott in April to examine the training programmes required to deliver the government's sustainable communities plan.

But his remit included a wider general assessment of the characteristics of sustainable communities. This is also the subject of a review of housing need conducted for the Treasury by Kate Barker, a member of the Bank of England's monetary policy committee.

Egan is due to complete his review this month, while Barker's interim report is expected to be published next week with the chancellor's autumn statement.

It is understood that the regional champions would co-ordinate planning and economic policies across the boundaries of councils and regional development agencies.

Among the university towns that have been singled out are Edinburgh, Manchester, Cambridge and Warwick. It is believed they have the potential to use graduates to develop employment-generating businesses.