Links between universities in Britain and the countries of the former Soviet Union are to be boosted through a Pounds 4.5 million project over three years designed to cement key educational and economic reforms.

The regional academic programme, funded through the Overseas Development Administration, aims to set up 120 academic partnerships to develop university-level diploma, postgraduate and targeted short courses in Know-How Fund priority areas. British universities which put together successful proposals will receive Pounds 20,000 over two years on top of funding for preliminary talks with their eastern partners and a post-project evaluation visit.

The project, which will work with specialists in Russia, Ukraine, Belarus, Moldova, Central Asia and the Trans-Caucasus, will be managed by the British Council's Moscow office and will form the core policy and operational area for the council during the programme. Moscow is the headquarters of the British Council's presence in nine countries in the region.

Tony Andrews, director of the Moscow office, said such a major programme marked a critical step forward in the council's Russian presence. "It is clear that the direction we're heading in, with the full support of the Foreign Office, is as a network of offices, teaching resource and information centres throughout the Russian Federation and former soviet republics."

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The programme will be administered by council officials in Moscow, Kiev and Tashkent. It aims to design new, applied academic and training courses as tools in supporting the region's transition to a democratic market economy.

Working with partner university departments, British experts will be expected to help redesign or introduce courses in private-sector business development, energy technology, environmental management, financial services, health management, agricultural reform and governance.

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Reforms in these areas are critical to economic and democratic transition. Robin Baker, deputy director of the British Council in Moscow, said: "The aim is to develop courses where the United Kingdom partner is a facilitator of courses which will eventually produce qualified graduates who can then move into the labour market."

The success of the projects will be evaluated continuously. Securing the management of the programme against competitive tender with university consortia and international management firms active in Russia, is seen as a major coup for the British Council.

"I have a conviction that Britain has a de facto favoured nation status in Russia. If they are looking for a partner in education and training, they would sooner have a British partner if they can," Mr Andrews said.