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Government has announced up to £60 million of new funding for the development of sustainable packaging, which could see household food scraps potentially transforming into environmentally-friendly plastic bags and cups.

The funding, to be bolstered by industry support, will be delivered by UK Research and Innovation (UKRI) through the Industrial Strategy Challenge Fund.

Innovators are being challenged to develop new forms of packaging and plastic, made from farming, food and industrial waste, like sugar beet, wood chippings and food waste.

Smart packaging labels, which, alongside a smart bin, could tell consumers the right bin to put recycling into and revolutionise the way recycling is sorted in waste plants is another focus area.

A ‘living’ sell-by-date patch which deteriorates at the same rate as produce to show consumers when their food is going off is also on the cards.

The scheme will also help in reducing single use plastics with increase use of recycled plastic in new products.

The investment is subject to industry entering into partnership with government and providing significant co-investment to this challenge, said a statement from the Department for Business, Energy & Industrial Strategy.

The government also announced a strategy to help boost bioeconomy, which aims to set world-leading standards for bio-based and biodegradable plastics.

The new innovation funding is estimated to boost the packaging sector, which clocked £11 billion in sales last year, by a further £500 million a year, said the statement.