The government has announced a 15-year funding deal worth £1bn for the Canal & River Trust, the new charity that evolved out of former quango British Waterways, which is set to launch in June.

The funding package includes a core grant of £39m per year and a £25m one-off grant to be spread over the next few months.

Also, from 2015, an additional grant of £10m per year will be given to the new charity, which will be reduced gradually over the last five years of the grant agreement tied to three performance measures of meeting satisfactory condition of principal assets, towpaths and flood risk management measures.

The government had already announced that the £460m commercial property endowment used by British Waterways to fund the infrastructure network would be transferred to the Canal & River Trust for the same purpose.

Further, the charity will get a ‘last resort’ government guarantee in relation to historic public sector pension liability.

The total funding will be £1bn over the next 15 years.

British Waterways' most recent accounts show it received £70.2m in government grants in 2009/10 and £58.9m in 2010/11.

Tony Hales, chairman of the Canal & River Trust, said: “With greater certainty of funding than ever before, we now have the opportunity to attract new investment and new supporters and give a greater role to the millions of people who live alongside and on the waterways.”

Subject to Parliament’s approval, the government hopes that the Canal & River Trust will launch in June. It will lay the Transfer Order to Parliament in February.

The inland waterways managed by the Environment Agency will transfer to the new waterways charity from 2015/16, subject to agreement of the charity trustees and the next spending review.

The Scottish government has decided not to change the status of British Waterways in Scotland, and it will remain in public ownership.