The London Tourism Action Group (LTAG), set up by Mayor Ken Livingstone to tackle the effects of the foot-and-mouth and September 11 crises, was meeting to decide how to spend the money as PRWeek went to press.
A campaign is expected to promote London's galleries and museums, and businesses will be contacted for their ideas for further projects.
LTAG marketing manager Kathryn Parry said that taking on external PR support is a possibility, but liaison with businesses will be handled by the LTAG member groups' in-house teams.
This latest spend is part of a £3.5m funding pot secured by the LTAG earlier this year through grants from the London Development Agency, Department of Trade and Industry and Department for Culture, Media and Sport.
So far £1m has been allocated for marketing support to firms through the Business Link for London scheme, while a mayoral office campaign to promote London's theatres and London Tourist Board (LTB) work to promote the capital across the UK have each received £500,000.
BGB & Associates was appointed late last year to handle the LTB campaign. BGB account director Lalla Dutt and senior account manager Jessica Harvey are handling the account.
BGB has already arranged a competition for families to visit London through Granada's This Morning daytime show, and offered discounted tickets through LTAG member the Association of Train Operating Companies.
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