Whitehall chiefs could be ready to launch a £25bn ($30bn) taxpayer-backed fund to reboot regional companies struggling in the wake of the COVID-19 pandemic.
The country's first ever sovereign wealth fund would see the government buy up shares in key businesses outside of London, according to a Mail on Sunday report
Officials are understood to be "actively considering" the plans proposed by British economist Jim O'Neill.
City investors could also support the scheme, which would form an integral part of Prime Minister Boris Johnson's agenda to "level up" the entire country post lockdown.
The taxpayer would recoup initial investments when the shares are returned to the original owners within 10 years.
The Government could also take so-called preference shares in the businesses, meaning taxpayers would be first in line for dividend payouts and proceeds which could be diverted into public spending projects.
Lord O'Neill said the scheme could help family-owned businesses reach their world-class potential whilst lifting the country out of recession.
"My feeling is you should never let a crisis go to waste. Why not use this mess to invest in British businesses while also helping manage our debt coming out of this?" said the former Goldman Sachs chief economist.
As the vice chair of the Northern Powerhouse initiative Lord O'Neill believes the north could benefit from taxpayer funding into companies specialising in advanced engineering, life sciences and green energy.
"The start-ups are often acquired really quickly from overseas or they fail to grow. Something like this would help in the areas where the north has world-class potential and I'm sure you could do something similar in the Midlands too," he added.
Sovereign wealth funds are popular around the world including across the Middle East, where state funds are invested into companies and other assets to generate income and returns for home economies.
Meanwhile Norway's sovereign wealth fund is the biggest in the world, holding £900bn worth of investments in shares, bonds and property.
The Treasury declined to comment.