Lewes says it is not one in the eye for the chancellor, but a bid to boost local trade

The East Sussex town of Lewes has always been a contradictory sort of place, probably ever since the barons demanded a say in government and defeated Henry III outside the town in 1264. It was here too that Tom Paine honed his polemical skills at the Headstrong Club in the White Hart during the 1760s. They still burn the Pope and sundry politicians in effigy every bonfire night. And yesterday, just along the high street, the Brewer's Arms was displaying a sign warning Alistair Darling that he was barred.

But today the town is going one step further along the road to contrariness by issuing its own pound notes, for the first time since the Lewes local bank - long subsumed into Barclays - stopped doing it in the 1890s.

It is not - as some media wishful thinkers have hoped - yet another slap in the face for the embattled chancellor to add to the humiliation of the Brewer's Arms, but an attempt to boost local spending on the local economy.

Nearly 70 businesses in the town, from Harvey's Brewery and Terry's Fishmongers to Rik's disks and Roger Murray, the acupuncturist, have signed up to accept Lewes pound banknotes, circulating at the same face value as pound coins, and to give them out in change to local shoppers. The town is following where Totnes in Devon has already led. The notes, of course, will not be legal tender anywhere else, though some will probably be kept by visiting tourists as souvenirs. Initially 10,000 have been printed. The scheme's organisers have guaranteed local shopkeepers that they will not end up out of pocket because of their involvement.

The notes, a soothing green colour, illustrated with Tom Paine's portrait on one side and Lewes Castle on the other, are printed on watermarked paper provided by a banknote company, with heat-sensitive fibres woven in and serial numbers on each. They are unlikely to be run off cheaply on anyone's photocopier, and any would-be thief would have to spend them locally or not at all.

Paine might have approved that the scheme was dreamed up by half a dozen local environmental activists, though it has gained the blessing of the town council, with Michael Chartier, the mayor, on hand to inaugurate the currency at a town hall meeting last night.

Oliver Dudok van Heel, a Dutch incomer to Lewes, who is one of the organisers, said: "We are not imposing anything on anyone and we have not waited for approval from any local authority or organisation. We just thought, let's give it a go. We may not make an economic impact but we hope to raise awareness and start a conversation about how residents themselves can stimulate the local economy."

In Cliffe High Street, Bill Collison, who runs Bill's greengrocers, was an early convert. "It's a great idea for round here - a bit quirky, like bonfire night. We like that in Lewes. I can't see any downsides to doing it, especially if it brings more people into my shop."

Neighbouring shopkeeper Andrew Clarke, who runs Potts' china shop, has so far hung back from joining in, but admitted to being impressed by the notes. "Security has been my worry and I'd be happier if I knew the banks were backing it."

Van Heel said one local bank manager had expressed interest before his head office put a stop to participation.

"We'll realise we're a success if we get the chain stores locally saying they will take the notes too. Otherwise, if in a year's time people say it's been a waste of time we'll just think of something else instead," he said.