The Office of Deputy Prime Minister awarded the funding after an analysis of the Implementing E-government statements submitted by councils. Whitehall expects all local government services to be available online by December 2005, a target first set by Tony Blair, the prime minister, in 2000.
A further £150,000 will be available for each council in 2005-2006 to ensure continuing investment in e-government.
The ODPM has also revealed further details of how it will measure whether councils have meet the 2005 targets.
It has introduced a best value performance indicator to make sure all local authorities have a common baseline. It will also freeze the local government services list until April 2006 to ensure councils are not aiming at a moving target.