Included in the proposals will be a new way to the UK IPO market for high growth companies.
This new route to the UK IPO market will have reformed rules on eligibility, free float and reporting requirements. These reformed rules are to ensure that the needs of internet and technology companies in particular are met.
"There is a direct and proven link between IPOs and job creation," said Xavier Rolet, London Stock Exchange Group Chief Executive.
"Attracting both entrepreneurial businesses and the investors that support them to the UK is key to driving growth and generating jobs. We are delighted to be working on this package of measures with the UK Government."
The Government aims to give European mid-sized high growth companies which are currently underrepresented on the UK's public markets.
"We need to ensure that companies starting here can be properly funded," said David Willets, Minister for Universities and Science.
"There is a rich crop of innovative European high-tech companies that will be going to the financial market over the next few years. We're determined to make sure that as many as possible should do and IPO and float in the UK, not elsewhere."
Willets is optimistic about the new route to market bringing new investment to London coming months. President Obama's Jobs act streamlined the regulatory headache for growth companies listing on US public markets. The Government's new proposals now can make the UK an equally competitive listing destination for high growth companies.
Neil Reimer of Index Ventures says it's important to support and encourage companies to stay in Tech city rather than sell to American companies. He says it's important to create a climate where tech companies want to come to Europe as much as the United States.
"It's great news for entrepreneurs everywhere that London is stepping up and not just being a great place to start a company but to build huge sustainable businesses," said Reimer. "Our hope is that today¹s good news from Downing Street will encourage more high-growth companies created in Europe to go big and stay home."
The Government will also be looking into current regulatory rules that many be discouraging investors from funding growth companies; as well as working with London Stock exchange to broaden the availability of equity capital for UK and businesses abroad who want to make the UK their global headquarters.
Those supporting the growth of Tech City hope a lot more European companies will IPO in London and not "sell out" as soon as an American giant comes knocking.
"We need to create digital companies who end up on the buy side and not sell out," said Stefan Glaenzer, co-founder of Passion Capital. "An IPO is not a sell out; it's the beginning of the next phase."
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