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Special tax breaks for entrepreneurs who build new plants in Britain could be considered, Business Secretary Peter Mandelson told the Financial Times in its Friday edition.
Mandelson also told the newspaper that "if he could put the clock back" he would like to see more large UK-owned manufacturers because of their role in creating wealth.
"In the 1980s and 1990s we as a country did not do enough to encourage manufacturing and this approach led to colossal economic damage" Mandelson said in the interview.
He was speaking as he unveiled a 22 million pound programme of government support for companies involved in using new generations of strong and light "composite" materials based on carbon fibre.
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