The Deputy Minister told the Western Morning News the Regional Growth Fund (RGF) was better value for taxpayers' money than Labour's former strategy as he visited AgustaWestland's helicopter factory in Yeovil.
The firm is set to receive up to £46 million of Government cash, which will in part help create a new civil helicopter facility – a first in Britain.
But critics have claimed the South West got five times more money via Labour's Regional Development Agency than through the RGF.
Mr Clegg responded that the cash was attracting ten times more match- funding from the private sector, which meant it was delivering "more bang for our buck".
He also dismissed suggestions the money, central to the coalition's plan to re-balance the economy away from a dependence on London and the financial sector, had been mired in bureaucracy.
Mr Clegg said: "It had some teething problems at the beginning. But the criticisms about delivering are fairly wider of the mark.
"That's because the pace we have been moving at is the pace companies want to move. And we are getting more bang for our buck."
In October, the Westcountry received £72 million from the fund. Plymouth-based Plessey Semiconductors is to build a new factory and a £3.9m grant for small business was handed to the Western Morning News and Plymouth University, which will create up to 500 new posts.
As well as the civil helicopter facility, AgustaWestland is to create the world's first high-speed commercial "rotorcraft" – revolutionising flying by combining the benefits of a helicopter and an aeroplane. AgustaWestland will match the £46 million funding with £100 million of its own money.
The Deputy Prime Minister said: "This Government money is not just a massive boost to AgustaWestland, but to Yeovil and Somerset as a whole.
"Creating jobs and growth is our number one priority for Britain. This means re-balancing the economy by supporting growth in every region and across a range of industries. That's what the Regional Growth Fund is all about."
The Liberal Democrat leader also pledged to continue pressing for a "mansion tax" on £2 million-plus properties after failing to secure a wealth levy in the autumn statement, despite £3.7 billion of welfare cuts.
He said he wanted to "do more" than increase the income tax threshold, effectively a tax cut for millions.
"The Conservatives, for reasons that perplex me, don't want to ask people living in vast £2 million properties to pay a little more. That is something they will have to explain to the British people. Our position remains clear and that won't change."
