UK ministers are drawing up legislation within weeks to set up a new “blue-skies” scientific research agency that will invest taxpayers’ money in cutting-edge technologies.

Business groups had questioned whether the government would go ahead with the agency after Dominic Cummings, UK prime minister Boris Johnson’s chief adviser and the main architect of the project, quit the government last year after a power struggle in Downing Street.

But Kwasi Kwarteng, the new business secretary, is pushing forward with the agency, which will answer to his department, according to government insiders.

The agency requires legislation because it will be a standalone agency, separate from UK Research and Innovation, which is responsible for research and development funding.

The Treasury has authorised £800m of spending on the agency, which will fund research in areas such as artificial intelligence and data.

“The UK’s new blue-skies research agency will have the independence to experiment with new funding models to back cutting-edge, high-risk, high-reward science here in the UK,” said the Department for Business, Energy and Industrial Strategy.

Government officials said it had not yet been decided who would run the agency, where it would be based, or its name.

The prime minister outlined plans for a “British Advanced Research Projects Agency”, dubbed Arpa, in the Conservatives’ 2019 election manifesto.

Mr Cummings wanted Arpa to be modelled on a US body with a similar name, which supported some of the most innovative technological advances of the 1960s and early 1970s, including interactive computing and the infant internet.

Oxford university, in a submission to a House of Commons science select committee review of the Arpa plan, said the government tended to shy away from “highly ambitious investments” in favour of “incremental advancements” for fear of risking public funds.

“Arpa offers an opportunity to address the short-termism and lack of follow-through in the current UK research funding ecosystem,” it added.

Policy Exchange, a think-tank, this month published a report saying Arpa should be given the chance to take big risks by ministers and the National Audit Office, parliament’s spending watchdog.

“Arpa must embrace failure,” said the report. “Arpa’s director, ministers and the National Audit Office must recognise that most projects will not achieve their objectives and that Arpa should be judged on the impact of its successes, not the proportion of its projects that fail.

“Government must tear up the standard rule book and allow money to be allocated to the best people and projects wherever they are found, in universities, research institutes or industry.”