The decision to fund more closed-circuit television camera systems linked to police stations continues the Government's love affair with CCTV, which has been credited with reducing crime rates in city centres and on council estates.
About pounds 85m will be spent on new CCTV systems, enough to buy 20,000 cameras. As well as crime-ridden estates and shopping centres, cameras will be fitted in car parks in an attempt to help the Government meet its pledge to reduce vehicle crime by 30 per cent in the next five years.
The Home Office said the money amounted to nearly pounds 30m a year for CCTV schemes - compared with pounds 15m spent between 1997-98.
A Home Office spokesman said: "CCTV has proved to be a useful deterrent to criminals and prevents crime. It is also a useful tool to the police for investigating crime and it leads to safer and more reliable convictions. There are dozens of examples of where CCTV has proved to work."
The widespread use of CCTV, however, is not without its critics, with some criminologists arguing that the devices merely displace crime to unmonitored nearby areas. Civil liberty groups have also raised concerns about a "big brother" society.
Yesterday's money will be split between the Home Office and the Department for the Environment, Transport and the Regions, and will be directed at high-crime areas.
About half the money will go towards crime prevention improvements to housing stock, with initiatives such as improved lighting, alarms, spy holes, landscaping, and providing facilities for young people.
Partnerships of local authorities and police forces will be invited to bid for a share of the money, which will be placed in a "challenge fund" to support both big and small local initiatives.
The Chancellor said that the Government would be allocating money for crime prevention "in areas where crime is highest".
More details of how the funds will be allocated are due to be announced by Jack Straw, the Home Secretary, later this month.
The pounds 170m is in addition to pounds 250m already pledged to help the country's 30 worst crime areas, which will be identified next month. Police officers will target the areas, and special anti-burglary measures, such as better security, will be installed.
A Tory spokesman said despite the extra money for crime prevention the number of police officers had continued to fall under the Labour government.
"This isn't going to alter that at all. Effective law and order policies rely on an effective police force," he said.
The Association of Chief Police Officers welcomed the extra funds.