The Department for Culture, Media and Sport (DCMS) has launched a new nationwide competition for cities and urban areas across the UK to bid to become the UK's first City of Culture in 2013.

It is hoped that the City of Culture initiative will build on the success of Liverpool's status as European Capital of Culture during 2008, following a feasibility study undertaken by Liverpool's Capital of Culture creative director, Phil Redmond.

Prospective bidders - from both cities and closely linked urban areas - have until 16 October to submit an outline application and will be expected to offer a high-quality cultural programme catering for a wide range of audiences, while also providing a clear, central focus to the area.

Initial bids will have to be submitted by 11 December, before a short list is drawn up based on the recommendations of an independent advisory panel by early 2010. Shortlisted bidders will then have until 28 May to submit a full application, with a final decision expected to be made by the end of 2010.

Culture secretary Ben Bradshaw said: "This competition aims to find a city or area outside London that has the wow factor, with exciting and credible plans to make a step change in its cultural life and engage the whole country.

"Liverpool's success last year brought pride, confidence and real economic regeneration to the area. Their triumphant year shows that the title of City of Culture will be a prize very much worth having, with a huge amount to play for."

Bidders will also be invited to a seminar in Liverpool on 10 September to learn about the economic and social legacy created by the European Capital of Culture status, which resulted in 3.5 million new visitors and generated £800m for the city's economy, according to a recent report from the Liverpool Culture Company (LCC).

The LCC report also highlighted the major developments currently taking place in the city's cultural infrastructure as a result of its success as European Capital of Culture, including the new Museum of Liverpool Life, which is scheduled to open in 2010.