Universities are invited to join with companies in a multimedia competition launched this week by science and technology minister Ian Taylor as part of the Government's Pounds 35 million Information Society Initiative for business.

"I want to see universities and centres of learning as part of this overall endeavour," said Mr Taylor. "There are tremendous ideas in universities about how to improve information technology."

The minister was speaking at the launch of the Information Society Initiative at Canary Wharf in London aimed at wiring up British business through 50 local support centres around the country, providing hands-on experience, and a new Internet web site for business. It also involves transferring technology from research establishments to industrial use and support for the digital technologies development.

Sweeping away criticism from academics that the Government's initiative sits oddly with decisions in other ministries that attack the research basis of the information society, Mr Taylor said: "Of course everyone would like more money. This is a coherent programme giving everyone a chance."

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Academic criticism of the initiative has come from Tom Wilson of Sheffield University. He points out that one of the main agencies for the support of research into information issues has been the British Library research and development department. This year the agency is to have its grants budget cut by Pounds 300,000 and its staffing cut by Pounds 100,000.

"The department has been the leader in supporting research into information retrieval and the information needs of citizens and specialised professions and sectors," said Professor Wilson, who also belongs to the British Association for Information and Library Education and Research.

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"Its priorities have included medical information, business information, and applications of information technology in a wide range of significant areas. These priorities are now in tatters following the latest cuts."

Behind the new initiative lies Government concern that British businessmen are curiously computerphobic compared to their counterparts overseas. Britain lags far behind the United States. Email is used by only 9 per cent of British small and medium-sized companies, and only 3 per cent are using it extensively, compared with 25 per cent in the US.

The multimedia competition is to attract entries for ways in which business performance can be improved through the innovative use of new technology. There will be Pounds 3 million worth of prizes.