The "funding for lending scheme", a joint initiative with the Treasury, will provide funding for banks at rates below market level and will be subject to banks improving their lending levels to the UK non-financial sector.

Speaking at the annual Mansion House Banquet for bankers and merchants, Bank of England governor Mervyn King said the scheme could be implemented within weeks.

Further details of the initiative, including how much money would be lent to the banks and what conditions would be attached, have yet to be confirmed, but reports suggested the figure could be around £80bn.

At the event, King blamed the "paralysing effect of uncertainty" for a lack demand in the UK economy, adding that the eurozone crisis is affecting the UK economy by impacting on bank funding costs, which have risen since the middle of 2011, leading to higher borrowing rates on mortgages and business loans.

He also pointed to signs of a slowdown in China and India and other emerging economies including Brazil, which he said were signs of "deterioration in the outlook".

Chancellor George Osborne, who also attended the banquet, said the stimulus packages would "support the flow of credit to where it is needed in the real economy".

"We are not powerless in the face of the eurozone debt storm. Together we can deploy new fire-power to defend our economy from the crisis on our doorstep," he added.

King also announced the introduction of another initiative which was first outlined in December last year called the Extended Collateral Term Repo Facility (ECTR), which aims to address a shortage of liquidity in the banking sector.

The ECTR will make it easier and cheaper for banks to borrow at least £5bn every month to cover any shortfalls in cash.

Small business representatives and printers told PrintWeek they were sceptical that the funding for lending scheme outlined by King would be of much benefit to SMEs and the print industry.

Federation of Small Businesses (FSB) chairman John Walker said that, as with prior small business lending schemes, the "devil will be in the detail".

"We await to see exactly how this scheme will result in banks changing their view of credit risk and more small firms’ applications being accepted.  

"There must be a clear reporting process to provide tangible evidence the money is being passed on to small firms and not just shoring up the banks."

Elsewhere, Technoprint Leeds managing director Mark Snee said that the initiative would not help to combat a lack of demand in the economy.

"Anything regarded as discretionary spending has been badly hit. The only thing that will stimulate demand is for people to believe that the Eurozone crisis has been resolved," he added.