In a partly shuttered shopping centre in Dundee, entrepreneurs are being offered free space worth £250,000 in a Dragon's Den-style competition.

The initiative, spearheaded by Michelle Mone, the former model behind Ultimo, the lingerie brand, is an example of creative thinking by landlords when addressing the increasingly vexed issue of empty shops.

Faced with the conundrum of how best to cope with paying business rates on the growing number of voids, Pruprim, the property part of the Prudential, which owns the Wellgate Shopping Centre in Dundee, no doubt decided that the space was worth giving away for the rise in footfall to the rest of the centre and in saved business rates. Yet the scheme, similar to a Scotland-wide, Scottish Government-backed initiative, has highlighted deeper problems: one is the dearth of entrepreneurs ready to pounce on falling rents and help to lift Britain out of recession; another is a shortage of bank lending that would allow them to flourish.

This reading is corroborated by the Local Data Company, which recently found that the increase in voids - empty units make up about 12 per cent of the total - was primarily the result of fewer new businesses starting up, rather than the acceleration in business failures.

The empty premises scarring high streets and lower-grade shopping centres have changed the attitude of local government, which has quickly found that beggars cannot be choosers. Paul Foley, managing director in Britain of Aldi, the discount supermarket chain, told The Times that in his experience local authorities are much more amenable than they were a year ago.

Today the KPMG/Synovate Retail Think Tank is calling for local government to re-classify vacant retail space to make it available for other uses. It says that the recession has accelerated a long-term structural problem - the migration to bigger, out-of-town chain stores has left holes in run-down and “tertiary” locations.

The think-tank noted that the top 85 retail locations now attract half the population - 40 years ago it was the top 200. Only pound stores and charity shops appear to have any appetite for lower-quality space.

This phenomenon is arriving in Britain's retail parks and ageing shopping centres. The Department of Local Government and Communities' suggestion that empty spaces be used for art exhibitions and community projects is unlikely to provide a long-term solution, unless demand rockets for amateur watercolours and book clubs.

It has taken Britain decades to recondition the shipyards, foundries and potteries of its industrial heyday - without local government intervention, the KPMG/Synovate Retail Think Tank argues, many of Britain's high streets are heading towards a similar obsolescence.

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