The UK government should encourage the publicly owned British Business Bank to invest in start-ups to offset the impact that Brexit will have on funding for the tech sector, according to a think-tank.

On Monday the centre-left Institute for Public Policy Research will present to the government proposals to help London’s start-ups “survive and thrive in the age of Brexit”. The group will recommend that the government establish a publicly funded scheme to reimburse companies if they buy services from a start-up that does not have a proven record.

The hope is that doing so would help start-ups find their first clients. Tom Kibasi, director, said the fund should be between £30m and £100m. “In Silicon Valley the large established businesses are run by people who had run start-ups themselves, so they’re more inclined to be supportive and take a chance on a start-up,” he said.

Additional funding from the British Business Bank could also help quell anxiety about a drop-off in funding from the EU after Brexit, the group said. The bloc’s public-private partnership, the European Investment Fund, has historically accounted for more than a third of investment into UK venture funds.

“Particularly after Brexit and the demise of the European Investment Fund, there is a question about the government stumping up some of its own money to plug that gap,” said Sarah Longlands, director of IPPR North, “though that has to be treated carefully because it’s public money.”

British entrepreneurs have expressed increasing anxiety about their ability to hire staff, access clients and raise money after Brexit. Many have already begun establishing offices and applying for regulatory licences on the continent.

Bim Afolami, a Conservative party politician, said government had to “underpin the advantages the UK has in incubating successful tech companies and help us move past Brexit uncertainty”.

Liam Byrne, shadow digital minister, added that universities and colleges also had to reinvent themselves to promote innovation. “If Britain is [to] go from superpower of the steam age to a leader of the cyber age, we need to embrace lots of the ideas in this great report,” he said.

The European Investment Bank has slashed deals with UK venture capital and private equity groups by more than two-thirds since the Brexit vote. An internal document seen by the Financial Times showed that the UK last year accounted for 8 per cent of the bank’s equity investments, compared with 27 per cent the year before.

The massive cut pushed the country out of its spot as the main recipient of EU venture funding, which is the single largest source of early-stage capital on the continent.

Company founders say hundreds of developers have rejected jobs in the UK since the referendum because of uncertainty over their future status. A fifth of tech jobs in London are filled by workers from the bloc, according to data from the Recruitment and Employment Confederation. Across the country as a whole, they hold 7 per cent of all tech roles, according to an analysis by the Department for Exiting the EU.

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