The European Commission has agreed to unfreeze payments of European Regional Development Fund grants in England which were suspended after a series of irregularities, poor administration and fines over the previous decade.
The Commission suspended payments in March after a long period of investigation and concerns about payments.
It has now agreed to allow England to re-enter the Fund's 2007-13 programme but only after substantial measures were taken to improve administration.
"The measures that this Government has taken have been recognised by the European Commission which has just announced that payments for the ERDF programme will restart, allowing vital regeneration work to continue," said communities secretary Eric Pickles.
The Fund was administered by regional development agencies but has now been moved inside DCLG.
The Department submitted an action plan to the Commission in June and new measures include standardized monitoring system and a strict programme of enhanced checks.
Potential Government liabilities for ERDF projects from its 2000-6 programme were estimated at £191m for 2009-10 but other liabilities were later identified, increasing this to £236m.
During 2010-1, this was reduced by £63m but DCLG now accepts that £38.1m cannot be recovered although it is still trying to recover the rest.
