Portsmouth 'would be interested' in becoming an investment zone - with looser tax rules

But councillor Gerald Vernon-Jackson said the Lib Dem administration had a series of requirements any zone would have to meet before it approved any scheme.

'We are interested in building up the freeport concept but we won't go near it if environmental or workers' rights are not protected,' he said. 'I also have a real worry it will allow developers to build whatever they like without planning permission. We don't want them having free rein.

'However, if they do encourage investment - and don't just move it - and don't infringe upon those requirements then we will explore the possibility.'

Investment zones were announced by the chancellor Kwasi Kwarteng during his 'mini budget' last month in a bid to encourage increased private sector activity through the loosening of tax and planning rules.

This includes cutting employment taxes, abolishing stamp duty and allowing companies to write-off equipment purchases.

The government said 'simplified' planning arrangements included 'reviewing ineffective EU requirements, lengthy consultations with statutory bodies and onerous national and local policy rules'.

'That is an unprecedented set of tax incentives for businesses to invest, to build and to create jobs right across the country,' Mr Kwarteng said. 'If we really want to level up, we need to unleash the power of the private sector.'

On Sunday the government began accepting expressions of interest from councils considering taking part in the scheme although it said it had set a 'high bar' for them.

Thirty-eight local authorities, of which Portsmouth City Council was not one, have already been directly approached about the possibility of creating a zone. Southampton City Council is on the list.

The government said it would confirm successful applications 'within weeks' of the October 14 deadline for submissions.

Announcing the process, the government said tax sites in freeports can be converted to investment zones. This would include the city council-owned Dunsbury Park site included in the Solent Freeport.

Supporters of the Solent freeport plan says it could bring up to £2bn to the region – but critics say the reduced regulation could be exploited.