BETTER collaboration between business and academia will bring significant economic benefits to the UK, a report has concluded.

The Lambert Review, commissioned by the Treasury, the Department for Education and Skills and the Department for Trade and Industry, said that firms and university research departments must continue to work closely.

The study made a series of recommendations to smooth the path between Britain's science base and the business community.

It included a greater role for regional development agencies and a new funding stream for "business-relevant research".

The report's author, Bank of England Monetary Policy Committee member Richard Lambert, said he was very positive about the potential of stronger collaboration.

Chancellor Gordon Brown said: "At their best, businesses and universities in the UK produce world-class results and can build world-beating partnerships, helping to foster productivity."