Employees who work for UK firms forced to shut by law because of coronavirus restrictions are to get two-thirds of their wages paid for by the government.
The scheme, announced by Rishi Sunak, begins on 1 November for six months and a Treasury source said it could cost hundreds of millions of pounds a month.
A restrictions update, which could see pubs and restaurants shut in the worst-affected areas, is expected on Monday.
Leaders in areas now under restrictions said the scheme did not go far enough.
In a statement, the mayors of Greater Manchester, North Tyne, Sheffield and Liverpool said: “We are pleased that the government has listened and recognised that any new system of restrictions must come with a substantial package of financial support.”
But they said it was only a “start” and more help was needed “to prevent genuine hardship, job losses and business failure this winter”.
The announcement comes just a fortnight after the government unveiled its Job Support Scheme – replacing the furlough scheme – to top up the wages of staff who have not been able to return to the workplace full time.
The latest scheme will only apply to businesses told to close – rather than those who choose to shut because of the broader impact of Covid restrictions.
The support will be reviewed in January. Until November businesses that are asked to close can continue to use the existing furlough scheme.
The grants will be paid up to a maximum of £2,100 per employee a month and the Treasury said they would protect jobs and enable businesses to reopen quickly once restrictions are lifted.