He said the Government had decided to use the Pounds 300m share of lottery funding that now goes to the Millennium Commission to create a new information and communication technology fund for the 21st century.
"This fund will enrich our lives at school and university, work, leisure, in our homes and workplaces, in our libraries and museums," Mr Heseltine told the conference. A new range of computers in schools will be one of the fund's priorities.
The announcement can be seen as an attempt to wrest the IT crown from Labour, which sees an electronic communications network for education and training as a vote-winner. At Labour's party conference, party leader Tony Blair spoke of a "national grid of learning", in which "every school would have access to the information superhighway, the computers to deliver it and the education programs to go on it".
Last year, Mr Blair announced a deal with BT to cable up schools, colleges, universities and libraries to the superhighway free of charge, and the cable companies followed suit. This year, he said he had won commitments from the industry and BT to keep costs to schools for access to the Internet and superhighway as low as possible.
No details are yet available of how the Government's Pounds 300m would be spent. But Gillian Shephard is known to be pleased by the news. As she told a fringe meeting last week: "Schools have a lot of IT, but some of it is getting rather elderly."