Coming on top of a pounds 20m grant from the European Union, the money brings to pounds 63m public sector funding secured by Manchester Millennium Limited - the taskforce set up to oversee the rebuilding work in the wake of the IRA bomb explosion last summer, which injured more than 220 people.
Regeneration chiefs say that the pounds 63m, together with a pounds 20m bid submitted to the Millennium Commission to create a distinctive "millennium quarter", will "lever in" more than pounds 340m of private investment for the city centre.
The pounds 43m announced yester-day by Mr Heseltine from London via a video link-up with planners in Manchester, will be channelled through the Departments of Transport and Environment.
The announcement was welcomed by the city, and by Labour's deputy leader, John Prescott, who was addressing a conference in Manchester.
Regeneration planners also unveiled their "masterplan" for rebuilding the city centre yesterday.
Mr Prescott said Labour backed the plan "in principle" - though final approval would depend on the "fine print".
The pounds 43m will go towards schemes including diverting traffic away from the city centre, new bus facilities, pedestrian and cycleways, and the creation of new public open spaces.
Richard Leese, leader of Manchester City Council and deputy chairman of Manchester Millennium Limited, said the financial commitment would ensure delivery of the plans within the three-year target.
"Now we have the masterplan, the commitment and the resources to start the rebuilding in earnest, the private sector will now have the confidence to invest," he added.Reuse content