Local councils could land a bonus of up to £1 billion under pending changes to the way revenue from business rates is divided up by the government.
Rules coming into force in April will hand local authorities a percentage of increased business rate taking in their area, creating an incentive for them to encourage local start ups.
Previously, business rates went straight to central government.
In a speech given on Wednesday, chancellor Gordon Brown said the changes could earn councils in England and Wales up to £1 billion.
The Treasury believes that the main beneficiaries of the plan, London and the West Midlands, could each enjoy an extra £150 million a year, while the North West would receive £130 million and Yorkshire £120 million.
Brown revealed the figures in a speech at the deputy prime minister's 'delivering sustainable communities summit' in Manchester.
Brown said: "Now under our Business Growth Incentive scheme local authorities keep a proportion of the additional business rate income generated by new business creation.
"Based on historical data we estimate that in total as a result of this measure local authorities could gain up to £1 billion over the next three years - a further incentive to encourage local indigenous business creation.
"And a boost for business in every town, city and region - every community across the country benefiting from more business and more jobs."
