CASH is starting to flow from a £2m pot to help the rural economy in the Winchester and East Hampshire districts.

The windfall comes from regional and European cash and is designed to last for six years.

The money was secured in early 2009 and around £330,000 of it has been spent in the first nine months.

Grants can be handed out to a range of rural businesses including farms, foresters and those in the tourism sector.

Money has also been used for childcare schemes, fixing community buildings, starting new businesses and funding environmental schemes.

The Fieldfare Local Action Group - a team of rural business and community leaders along with council chiefs - hands out the cash.

Andrew Gordon, who chairs it, said: "The Local Action Group has been 'in business' for just nine months, but so far we have offered over £330,000 of grant funding to support 20 projects across the two districts.

"We are already receiving positive feedback about the difference that this funding has made to people's quality of life and the long term viability of their rural business."

Programme manager, Ken Brown, said he was receiving new approaches for funding "on a daily basis".

He said: "The diversity of projects that people want to develop is very exciting."

He added: "Funding has supported rural childcare projects, added value to farm products, improved community buildings, encouraged energy efficiency and helped young people start their own businesses."

Winchester City and East Hampshire District Councils are providing office support to the scheme.

Cllr Robert Humby, who also runs a plant nursery in Owslebury, is Winchester's representative on the project. In that role he recently presented several grants to rural businesses and community groups at Winchester Guildhall.

The £2m pot is in addition to £400,000 that Winchester City Council has made available to stave off the recession.

The cash was collected during the boom years and is now being used to help businesses through leaner times.

As well as urban schemes, some of the £400,000 is being used in rural areas, such as helping village shops to expand and modernise.

To find out more about the £2m project visit www.winchester.gov.uk/leaderfunding or contact Ken Brown at kbrown@winchester.gov.uk or call 01962 848588.