Forty percent of the UK's household waste comes from supermarkets

The money from the new innovation fund will help promote ways of cutting down supermarket packaging, which accounts for more than 40% of household waste.

Environment Minister Elliot Morley said "there's a lot that can be done to reduce packaging" at the London launch.

He said supermarket chain the Co-op was working to eliminate cardboard boxes on the outside of tomato puree.

"They can reduce waste and still display the product in an attractive way to consumers, so they get the benefits of better design, reduced costs and less packaging," Mr Morley said.

"That's just one small example but we are keen to see more of that approach."

CUTTING HOUSEHOLD WASTE Supermarket chain Co-op to sell tomato puree without cardboard boxes Tea producers Tetleys have scrapped selling tea in a cling film-wrapped box, now opting for a resealable paper bag Smaller portions require less packaging

He said the "groundbreaking initiative" was needed to help reduce the more than 30 million tons of waste produced in the UK every year.

The fund has been launched by the Waste & Resources Action Programme (Wrap), a not-for-profit private company backed by the government.

Wrap chief executive Jennie Price said: "Many consumers are becoming more aware of how much rubbish they are generating.

"They are recycling more and more, but there is relatively little they can do to control how the goods they buy are presented and packaged. "

Supermarkets and their supply chains have a major influence on what ends up in the household dustbin, she said.

Ms Price added: "Wrap is looking forward to working with them to develop innovative products and packaging to reduce waste."

Kevin Hawkins, director general of the British Retail Consortium (BRC), said: "The BRC supports the launch of the fund and would encourage all those involved in the design of packaging for the retail sector to apply.

"This fund will create the opportunity to make major advances in the retail arena to the benefit of the environment and the sector as a whole."