Stoke, Birmingham and Sheffield have each got one. Newcastle has plans for an academic-themed one and Bedford is bidding for £15m to create one. What are they? Cultural quarters, of course.

It seems that no self-respecting local authority these days is without plans to establish its own cultural quarter - or cluster, as those in the know now call them. A quick internet search reveals more than a dozen that have been pulled together already and a dozen more that are at the planning stage.

But are cultural quarters really the product of joined-up thinking that will put culture at the heart of urban planning, or merely one more in a long line of regeneration initiatives designed to get residents and private developers back into town centres? And what role, if any, should museums play?

Cultural quarters may seem like a fairly recent phenomenon, but in one form or another they have been around for a long time. During and after the French Revolution, artists took over abandoned buildings and converted them into workshops and cultural places. Naturally they wanted to live and create work in close proximity, often at the inexpensive and rough end of town.

In the mid-19th century, Greenwich Village, New York, was beginning to be known for its art clubs, literary societies and private picture galleries. At the same time, a different sort of cultural zoning was taking place on the other side of the Atlantic.

In London, the proceeds from the 1851 Great Exhibition were used to fund perhaps the first manufactured and museum-led cultural quarter.

In South Kensington, the Science Museum, the Natural History Museum and the Victoria and Albert Museum were built side by side, so that the masses could get their taste of empire, natural history and science at the Victorian equivalent of a one-stop shop. (The current Exhibition Road project to pedestrianise the area between these three national museums takes the idea of a cultural quarter to its logical, and grand, conclusion.)

But it wasn't until the 70s and 80s that policy-makers and politicians began to look seriously at culture as a way to regenerate urban areas and dampen down inner city unrest.

Deindustrialisation was beginning to leave some pretty ugly eyesores in and around town centres - in particular, on waterfront sites - and politicians were keen for alternative uses that would bring jobs, and hopefully tourism, to their town centres.

One of the first on the scene was the Sheffield Cultural Industries Quarter, which was created in the mid-80s. Nick Dodd, the chief executive of Sheffield Galleries and Museum Trust, says it is one of the most extensive and longest established cultural quarters. It takes in the art cinema, craftmakers' studios, artists' studios, BBC Sheffield and Hallam University Students' Union.

The Graves Art Gallery and the Millennium Galleries sit on the edge of it. (Ironically, the area also includes the National Centre for Popular Music, one of the least successful attempts at urban regeneration ever.)

But for all the talk of cultural quarters, it's quite difficult to define what one is. They come in all shapes and sizes: some are museum-led, some are not; some have an emphasis on creative industries; others mix performing arts with visual arts and community initiatives.

Gail Dexter Lord, the president of the cultural consultancy Lord Cultural Resources, says that a typical urban mix contains an approximately equal share of retail/food, office, residential and cultural usage.

It becomes a cultural quarter, she says, when the cultural element gets above 50 per cent. 'I think what has happened since the 90s is an effort by planners to plan cultural quarters to get the "mix" right from the start.'

A number of the cultural quarters that are now being planned are strongly museum-led. John Moore, the director of the Cecil Higgins Art Gallery and the Bedford Museum, says the strength of Bedford's plan for a cultural quarter is that it is based on existing museums and galleries: 'We have a natural setting and excellent cultural resources without having to manufacture them.'

Whereas museums might find it hard to justify large-scale spending solely on the basis of culture, Moore says, local authorities do buy the argument if they can see the economic benefit. The plans include a revamp of the art gallery and museum with retail, residential and artists' studios on adjoining land.

Lindy Gilliland, the project manager at the Great North Museum, agrees that the museum element is crucial. The Newcastle Cultural Quarter will consist of the Hancock Museum, the Museum of Antiquities, the Shefton Museum, the Hatton Gallery and the Playhouse Theatre, which are all close to each other.

'We wanted a way of linking the academic scene with the rest of the city to create more of a critical mass of cultural attractions,' says Gilliland.

But how is the success of cultural quarters measured? So far it has proved tricky and most of the evidence is anecdotal. One of the reasons for a cultural quarter is to make an area more attractive to live and work in - for residents and incomers alike. This is where cultural quarters score most highly.

One of the few evaluations of cultural quarters was published by the thinktank Demos in 2003. Northern Soul claimed that Newcastle and Gateshead had managed to reverse the 'brain drain' from north to south, precisely because of the creation of arts and culture venues such as the Baltic and the Sage music centre.

According to the report's author, Anna Minton, students who would normally go to university on Tyneside and then move south were choosing to stay in the area. 'There seems to be a brain gain from the South East as a growing number of professionals and creative people are attracted by the cultural buzz of Newcastle and Gateshead,' says Minton.

Shepway District Council had been planning a cultural quarter in Folkestone for some time. It wanted to bring life back to an old part of town that had become run down and neglected. Local employers were keen too - they recognised that a vibrant cultural life would attract people to the area and make them want to stay.

Locum Consulting did the masterplanning for the project. Seàn Young, the managing director, says the key to its success was involving the local community from the start. 'Community-led cultural projects are a success,' says Young.

'What Folkestone wanted was community-led, but we recognised it was necessary to have some element of public sector funding to kick start the process.' He says a cash injection helps to speed up a process that would naturally take decades to evolve.

Drawing in cash from a variety of sources is definitely one of the advantages of a cultural quarter plan. European, national, local and private funders all like the idea of joined-up thinking and a strategy that goes beyond just one iconic building.

Gail Dexter Lord says that cultural quarters are part of most cities' future plans. 'The fascinating part is the role of museums, which often act as anchors because they bring more stable funding than other cultural uses, such as artists' studios.'

Ian Lawley, the head of museums in Stoke, agrees that one of the major benefits of having a cultural quarter is that it has enabled them to unlock funding sources that might not otherwise be available. 'There has been private sector investment in the area in shops, restaurants bars and clubs.'

Lawley says this has helped to attract additional public funding for pedestrianisation, lighting, street furniture and signage. In Oldham the developing cultural quarter has opened the way to diverse funding streams.

Oldham is in the second phase of a four-phase plan. First came Gallery Oldham, in 2002. Next is a new library and lifelong learning centre. Phase three will be an archive and local studies centre and phase four is a performing arts centre.

Sheena Macfarlane, the head of heritage, libraries and arts in Oldham, says there was a definite 'wow' factor when the gallery opened, and visitor figures have grown from 35,000 in the first year to a predicted 60,000 this year. 'The whole area has changed significantly,' says Macfarlane.

She adds that having a long-term plan to develop a cultural quarter has meant significant local authority investment and a commitment to see the project through. Different parts of the project have been funded by the council, the European Regional Development Fund, private investment through a Private Finance Initiative and it is hoped that lottery cash will be forthcoming for the final stages.

If the thought of access to new pots of money sounds tempting, it is not quite as simple as drawing a ring around existing cultural assets and calling it a cultural quarter.

'Too many cities seem to pick a geographical area and then just badge it,' says Nick Dodd at Sheffield. 'There's a difference between wrapping up the museum, gallery, library and theatre and actually having an area for production and creative industries.'

Ironically one of the biggest drawbacks of establishing a cultural quarter is one of the reasons why they are set up in the first place. The idea is to regenerate an area, create a cultural buzz and make it a nicer place to live. But if this is too successful property prices shoot up and local people and artists are priced out.

In Sheffield rents in the cultural quarter quadrupled in the first three years of its existence. Dodd says: 'Cultural quarters are quite fragile. Artists are often pioneers in terms of urban regeneration but because they make an area a better, more interesting place to live, prices go up and that forces the producers out.'

The way to avoid this is to have a strong element of control, says Seàn Young at Locum. 'The council or cultural quarter organisation has to own some of the key buildings if you want to prevent property prices going up and artists been driven out of the area.'

Young says that for museums and galleries to play a full part in a cultural quarter they have to develop their popular appeal. Opening hours, for example, are an issue: 'A lot of activity in a cultural quarter is in the evening' - precisely when most museums are shut.

The latest evidence shows that it's not only the policy-makers who believe in the power of culture. People Make Places, a new report by Demos, says that the public sees arts centres as among the most welcoming places. Users appreciate the diversity and the tolerance of these venues and enjoy the sense of status and esteem that they confer.

The report adds that in order to prevent longer drinking hours making cities no-go areas at night, the opening hours of public buildings such as museums and libraries should be 'liberalised' - so you may yet get your cappuccino and culture side by side in the evening.