A local furlough scheme could see the government subsidise two thirds of the wages of workers in pubs, restaurants and other businesses that are forced to close to stop the spread of Covid-19.

Chancellor Rishi Sunak is poised to announce additional financial support measures today ahead of a shutdown of hospitality outlets across parts of northern England next week.

It was unclear ahead of the announcement which, if any, other businesses will be included.

A Treasury spokesperson said: “The chancellor will be setting out the next stage of the Job Support Scheme later today that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months.”

A new system of restrictions divides England into three tiers of escalating severity. Merseyside and other parts of northern England will be placed in the highest tier as some hospitals start to run out of dedicated coronavirus beds.

Businesses such as pubs, restaurants and cafés will be forced to close, while a ban on overnight stays is also reportedly being considered

The local furlough initiative could remain in place for as long as businesses are locked down.

The Job Support Scheme, which will replace the furlough scheme when it ends this month, has been widely criticised by the travel industry as not going far enough.

Greater Manchester mayor Andy Burnham told the BBC he would challenge the closure of pubs, bars and restaurants if the measure did not come with financial support.