A Norwich northern bypass 'war chest' is to be created by Norfolk County Council, with councillors next week set to agree to pump �2.5m into a fund for the road.

With the government only agreeing to fund �86.5m towards the �141.5m Northern Distributor Road (NDR), which will stretch for 19.5km from Postwick on the A47 to the A1067 Fakenham Road, the rest of the cash will have to be found by the county council.

Some of the money is earmarked to come from developer contributions through the new Community Infrastructure Levy, but the county council will have to borrow to plug the gap.

Officers are recommending that a reserve fund is created to mitigate future borrowing costs for the road, which the council says is necessary to speed up travel and cut congestion and rat-running in the north of Norwich.

The cash for that fund is part of �5m which the county council's cabinet is likely to agree to allocate on Monday.

It is proposed a further �2m is transferred into the Norfolk Infrastructure Fund, a pot of cash for economic growth boosting projects.

And an extra �500k is earmarked for the Highways Maintenance Fund, taking the total set aside to fix roads in 2012/13 to �4m.

The council has saved �60m in the past year, underspending by just under �840k.

Ian Mackie, the county council's deputy leader and cabinet member for finance and performance, said: 'I am particularly pleased that through tight financial management we have been able to deliver �60m of savings, in order to live within our means, balance our budget and deliver a further year of zero council tax increase, this is an incredible achievement.

'Our sound financial management places us in the position to be able to propose a number of one-off financial measures, particularly focused on longer term economic growth and highways investment.'

However, Green county councillor Andrew Boswell, his party's transport spokesman, said the �2.5m for the NDR would be better spent on apprenticeships.