The Lake District will become the first region in the UK to launch its own currency.

It is part of an initiative to boost local, independent businesses and generate funds for two Cumbrian charities.

The Lakes Currency Project is an independent, private company run by Ken Royall.

Ken, who was born in Barrow and lives near Windermere, started the company to contribute something to the local area.

In spring, the company will launch a paper currency consisting of Lake District themed notes.

Mr Royall said the £1, £5, £10 and £20 Lake District notes will be exchanged one for one with sterling, but can only be spent in participating businesses that are locally owned, trade locally and were either founded in, or unique to the area.

They will be valid for a year and the designs are being kept under wraps until the official launch later this year.

He said: “First and foremost the Lake District pound is going to be a fun way for people to discover and enjoy the unique local culture we have on offer in the Lakes.

“People can buy the notes one for one with sterling and then spend them in local retailers, cafes, restaurants and tourist attractions.

"As well as driving footfall to all our fantastic local businesses, this will also be a great way for people to explore the unique character of the area and connect with its people.

"We hope that by encouraging more people to use our local businesses, the Lake District pound will not only strengthen our local economy but add to the region’s sense of identity and pride in itself.

"There are many incentives for people to buy and use these notes.

"Firstly, they are visually striking, with each note telling the story of different aspects of the character of the Lake District, Cumbria and the region’s heritage, landscape and people.

"It would be impossible to tell the Lake District’s story in just one set of notes, so we will be launching new designs every year.

“Secondly, by using the Lake District currency people will know they are helping support unique local businesses, which we know are the fabric of our communities – we believe this will be a great incentive in itself.

“Lake District Pounds can be spent, respent, or swapped back to sterling at any time during their period of validity."

If people buy the notes as souvenirs and do not spend them, proceeds will be split between charitable organisations Cumbria Community Foundation and the newly formed Lake District Foundation.

Mr Royall added: "The further incentive for local businesses is that we will be driving footfall to their premises and providing a high profile way to promote them to visitors.”

Mr Royall said the project had developed a souvenir book telling the story of the notes and the people and places featured on them.

Lake District Pound outlets would be able to sell these and other merchandise alongside the notes to create revenue.

People will be able to buy the notes from outlets across the Lake District, including many Post Offices.

Mr Royall said: “When Lake District Pounds are sold into circulation, their face value is immediately protected in a Sterling Reserve Account, so that there’s no risk to local businesses who accept the currency.

"These businesses can deposit their notes at participating Post Offices, which will transfer the equivalent amount in sterling straight to their bank account.”

Post Office HQ has agreed with the Lakes Currency Project that postmasters can use the Post Office Counter to exchange Lake District Pounds and deposit the same amounts in the customers’ high-street bank accounts as sterling.

Mr Royall said: “We have additionally put systems in place specifically to make sure that Post Offices do not run out of cash to exchange for Lake District currency.

“The Lake District Currency will be valid for a calendar year and until January 31.

"The new notes will be available from the beginning of December which means that anyone who wants to swap old notes for new ones can do so.

“People can exchange their Lake District currency back to sterling at any time during their visit to the area.

"If they aren’t able to exchange their notes for sterling before they leave the area they can contact us directly to send us the notes so we can do it electronically.

“We don’t want anyone to have to take home unused Lake District Pounds if they don’t want to. However, we do know that our notes will create a very special souvenir."

One of the first people to sign up to the project was Laura Johnson, owner of Laura in the Lakes Cafe and Catering and Cakes from the Lakes in Keswick.

Mrs Johnson said: “The majority of our customers are tourists, and lots of children and families, and you can just imagine a child coming in and spending their tourist notes on something that is made in the Lake District.

“The notes are really stunning and beautiful and I can see that people would definitely want to keep them and for that money to go into a pot that helps the environment and people just makes it a no-brainer.

“It’s a really exciting project and I couldn’t be more supportive.”

Robin Love, postmaster at Ambleside Post Office, said: “It will hopefully bring more people through the door to spend money on goods.

“I have seen lots of things come and go in the past 20 odd years and some of them last a year or so, but I think it’s worth backing this.”

Any businesses interested in supporting the initiative can get in touch with the Lakes Currency Project Team by contacting ken@lakedistrictpound.com

The Lakes Currency Project has received start-up funds from a range of private, local investors.