The BBC is donating its share of the profits from the 500,000 Fame Academy compilation CDs that have been sold so far, as well as CDs released by winner David Sneddon.

Sneddon, a former busker, gets a seat on the fund's board of trustees to help decide how the money is spent.

It's not easy for performers to get noticed - it took me seven years and a lot of perseverance David Sneddon Fame Academy winner

Some money will go to Children In Need, with the board to decide who deserves a share of the remaining cash.

The BBC has not finalised details of how the fund will work and who will be eligible to apply.

But it will be used to help "young people achieve excellence in the performing arts", a statement said.

Sneddon, who topped the chart with his debut single on Sunday, said: "It's not easy for performers to get noticed - it took me seven years and a lot of perseverance to get to number one.

Sneddon was in the Fame Academy mansion for 10 weeks

"I'm thrilled to be given the chance to help someone else realise their dream."

The BBC is donating its advance from record company Mercury, which released the Sneddon and Fame Academy CDs.

It is also giving its share of profits from 14 million phone votes - which cost 10p each - made during the series.

Almost eight million people tuned in to see Sneddon win the talent contest in December after he had spent more than two months in the Fame Academy house.

On the bursary's board of trustees, the BBC's controller of entertainment commissioning Jane Lush will sit alongside Sneddon.

Also helping choose worthy beneficiaries and advising hopefuls will be BBC Talent's Lorna Clarke.