The number is double that first targeted when the scheme, called the New Enterprise Allowance, was first launched in October.

It will be trialed across Merseyside this month and subsequently rolled out nationally by the autumn.

Those budding entrepreneurs whom see self-employment as a viable option will receive allowances of upto £1,275 over six months. They will be also be paired with “volunteer” mentors drawn from their local business community and who will vet business plans and if they prove strong enough, Jobcentre Plus will provide a loan of up to £1,000 to cover start-up costs.

The announcement was greeted keenly by Tony Heywood, the CEO of business support website yoodo.biz, who said: “Finally, a government policy which encourages everyone to give business a go!   This announcement allowing the jobless to keep their benefits when first starting a business opens up the entrepreneurial gates to a much wider audience. The Cameron administration was quick to promote the goal that “work should always pay more than doing nothing”, and it’s encouraging to see this being extended to enterprise, too. Starting a business is a genuine way to beat unemployment; plus successful businesses generate further employment opportunities and so benefit the wider economy.”

The measures announced form part of a significant overhaul of the way government supports new businesses. The Business Department said its regional network of ‘Business Link’ advice centres will close by November 25 and be replaced by a combination of website and contact centre support for general business enquiries from the 24pc of small businesses that are not online.

Businesses will have access to up to 40,000 “volunteer” mentors from June, replacing the 1,600 “paid” Business Link advisers.

Several thousand companies with potential to increase turnover or their staff by more than 20pc will receive coaching support. The Government is negotiating with business and finance specialists to provide the service.

Prime Minister David Cameron said:

“Throughout this year and beyond we will be focused relentlessly on supporting growth and driving job creation across our economy. Backing new enterprises to start up and small businesses to grow will be what transforms our economy and will deliver the many thousands of new jobs we will see created this year.

“It is vital that we ensure businesses, and those people who find themselves out of work but have the drive and desire to set up their own business, have all the advice, support and mentoring they need. Together we can make the years ahead some of the most dynamic and entrepreneurial in our history.”

Employment Minister Chris Grayling said:

“We will only get our economy back on track when we create a climate in which the private sector can grow and develop, creating jobs and opportunities for people across the country.

“By expanding the New Enterprise Allowance we can ensure that those who find themselves out of work but with a good idea get the right advice to turn that idea into a successful business venture.”

Business and Enterprise Minister Mark Prisk said:

“In the current economic climate, it has never been more important to promote an enterprise culture in the UK. It is vital that businesses have the information, advice, and mentoring they need to grow and expand.

“The best people to advise small businesses are those who have already started and run successful companies, so it is particularly important that this new framework for helping businesses to improve focuses on providing access to business mentors.”

The plans are in addition to the governments previous announcements of  introducing a regional National Insurance holiday worth up to £50,000 for new businesses and extended Entrepreneurs’ Relief from Capital Gains Tax from the first £2 million to the first £5 million of gains made over a lifetime.

These measures, and the new business improvement delivery package announced today, are part of a broader governmental programme to free enterprise and help small firms grow and prosper.