Super-fast broadband to Cornwall should not be derailed by fears over a European funding claw back, it has emerged.
Last week, the Government was thought to have frozen all Convergence projects in the county because of a lack of match-funding from public coffers.
But Whitehall officials have now sought to clear up the confusion and allay fears that hundreds of millions of pounds would be handed back to Brussels.
A spokesman said the £371 million fund earmarked for Cornwall has "never been in doubt". Projects in receipt of private finance to match-fund the European cash have been told they can proceed.
This is believed to include the £100 million Next Generation Broadband project, which is thought to have private-sector backing,
Meanwhile, a Cornish company that feared its £265,000 Convergence grant had been snatched away has been told it will not miss out on the money.
Spiral Construction, a specialist staircase manufacturer based in Helston, had received verbal approval for a grant. But the offer letter was withheld when the apparent freeze was placed on Convergence projects – despite providing match-funding itself.
It has now been told by the RDA that its case has been resolved and that an offer letter will be sent out shortly.
The freeze still does apply to the "single pot" of funding from the South West Regional Development Agency (RDA), which the Government is to abolish.
The Treasury has also imposed tighter restrictions on what projects public money can be spent on to ensure cash is not wasted.
In a statement issued from the Convergence Partnership Office, it says that the RDA has been provided "some clarification" on funding from the European Regional Development Fund (ERDF) – which is to lavish £371 million on Cornwall until 2013.
It adds that "there will be greater central scrutiny on the way ERDF is spent".
The RDA will continue to administer the programmes until "new arrangements are in place" after it is scrapped.
The Department for Business, Innovation and Skills has also confirmed the freeze applies only to money in the RDA's control.
A spokesman said: "The future of the ERDF programme has never been in doubt.
"But the fact is that the RDAs are in the process of being wound down, so it is only proper that spending control is exercised, particularly during the course of a spending review.
"The moratorium on match-funding from the RDA single pot will therefore remain in place, to ensure only exceptional new spending commitments are made.
"Going forward, levels of ERDF commitment will be monitored to ensure they offer affordability and the flexibility for projects to be developed by local authorities and others after the RDAs have been abolished."
West Cornwall Liberal Democrat MP Andrew George, who raised the issue in the Commons, said: "I am pleased that common sense is prevailing."
Last week, the Government was thought to have frozen all Convergence projects in the county because of a lack of match-funding from public coffers.
But Whitehall officials have now sought to clear up the confusion and allay fears that hundreds of millions of pounds would be handed back to Brussels.
A spokesman said the £371 million fund earmarked for Cornwall has "never been in doubt". Projects in receipt of private finance to match-fund the European cash have been told they can proceed.
This is believed to include the £100 million Next Generation Broadband project, which is thought to have private-sector backing,
Meanwhile, a Cornish company that feared its £265,000 Convergence grant had been snatched away has been told it will not miss out on the money.
Spiral Construction, a specialist staircase manufacturer based in Helston, had received verbal approval for a grant. But the offer letter was withheld when the apparent freeze was placed on Convergence projects – despite providing match-funding itself.
It has now been told by the RDA that its case has been resolved and that an offer letter will be sent out shortly.
The freeze still does apply to the "single pot" of funding from the South West Regional Development Agency (RDA), which the Government is to abolish.
The Treasury has also imposed tighter restrictions on what projects public money can be spent on to ensure cash is not wasted.
In a statement issued from the Convergence Partnership Office, it says that the RDA has been provided "some clarification" on funding from the European Regional Development Fund (ERDF) – which is to lavish £371 million on Cornwall until 2013.
It adds that "there will be greater central scrutiny on the way ERDF is spent".
The RDA will continue to administer the programmes until "new arrangements are in place" after it is scrapped.
The Department for Business, Innovation and Skills has also confirmed the freeze applies only to money in the RDA's control.
A spokesman said: "The future of the ERDF programme has never been in doubt.
"But the fact is that the RDAs are in the process of being wound down, so it is only proper that spending control is exercised, particularly during the course of a spending review.
"The moratorium on match-funding from the RDA single pot will therefore remain in place, to ensure only exceptional new spending commitments are made.
"Going forward, levels of ERDF commitment will be monitored to ensure they offer affordability and the flexibility for projects to be developed by local authorities and others after the RDAs have been abolished."
West Cornwall Liberal Democrat MP Andrew George, who raised the issue in the Commons, said: "I am pleased that common sense is prevailing."