The cash will be targeted at the BCFs Challenge competition and the Get Set award scheme.
Last year Raleigh loaned 40 bikes to the BCF for use at the final of the Youth Millennium Games in Southampton but the cash pledge means the Challenge scheme now gets the Raleigh name in front.
Challenge is run nation-wide and is the first taste of competitive cycling for many young riders. Culminating in regional finals, Challenge gives its winning riders a chance to train with World Class Performance athletes.
Get Set is a skills and awards scheme aimed at providing clubs, schools and other groups with a safe and structure range of cycling activities, which can be delivered in a school yard or sports hall.
Raleigh MD Phillip Darnton said: "We are really excited to be involved with a scheme that will give young people the chance to taste the thrill of competition at all levels of cycling. The icing on the cake for all involved will be realising the potential shown by our British riders through to a professional, and possible, Olympic goal. Raleigh has a long and successful history in the support of cycling champions, and involvement at the early stages of development will be even more satisfying."
The cash was welcomed by BCF Chief Executive, Peter King:
Raleigh is a big player and a household name, so obviously this new deal is good news for the Federation. Everyone in cycling is very optimistic following last years Olympic successes. I think that the flourishing relationship between Raleigh and our grass-roots programmes augers well for the long-term popularity of cycling in this country.
BCF Development Director, Suzanne Glavin said Raleigh and the BCF would work well together:
"Both our organisations are passionate about promoting cycling and involving more children and families in taking part in a sport that is healthy, fun, enjoyable and provides a skill for life. We are looking forward this year to delivering more quality Raleigh Challenge 2001 events plus more skill award courses for children throughout the year. It is great to have such a well established cycling company on board."