President Zapatero announced a packet of measures to parliament yesterday that will be approved at today's weekly cabinet meeting.

Eleven thousand million euros - representing 1.1% of GDP - to be charged to this year's accounts will be invested to arrest rising unemployment levels and reactivate the economy.

The lion's share - eight billion euros - will be spent on a local level, mainly on infrastructure and public works projects, and is designed to create 300,000 new jobs. This total represents twice the forecast spend by councils for next year.

Mr Zapatero also revealed that €800 million would be invested to support the struggling automotive industry, €600 million will be spent on environmental projects, €500 million on R&D, €400 million on renovating police and Guardia Civil stations, €120 million to renovate housing, €30 million to stimulate tourism and a further €400 million in regional government funding.

An extra three billion euros will be released to guarantee credit for struggling small and medium-sized companies in addition to the seven billion euros already set aside for this purpose in next year's budget.