When Mark Jones was asked by a newspaper last year to name his favourite musuem, he didn’t choose a world-renowned institution such as the Louvre or the Hermitage. Instead he opted for the quirky Museum of Jurassic Technology in Los Angeles where exhibits include a micro-miniature sculpture of Pope John Paul II made out of human hair and placed within the eye of a needle.

“It has the atmosphere of a cabinet of curiosities and leaves visitors slightly puzzled,” Jones told the newspaper. “It is one of the world’s most interesting museums.”

The director of the Victoria and Albert Museum may be in charge of one of Britain’s most traditional repositories of artefacts but he has an eye for the offbeat and innovative.

His interest in contemporary design is one reason Jones has become involved in a pioneering project to open an offshoot of the V&A in Dundee. Once the details are finalised, the V&A on the Tay, as it has been dubbed, will be a showcase for design and applied arts. It will also be one of the few places outside London to feature some of the museum’s hugely popular blockbuster exhibitions.

“We were approached by the University of Dundee and asked if we would be interested in having some sort of presence in the city,” says Jones. “We said we would, if the terms were right and the right venue was available. It’s not going to be like the Tate Liverpool, which is a branch of the Tate in Liverpool. It will be more of a partnership, a collaboration with the University of Dundee and Duncan of Jordanstone College of Art. We haven’t settled on a name but V&A Contemporary has been suggested or it could be the V&A in Dundee.”

When plans for the museum were revealed by The Sunday Times late last year, some questioned the wisdom of establishing a cultural landmark in a bleak, post-industrial place like Dundee. Scotland’s fourth largest city still has an uneviable reputation for Soviet-style tower blocks set in a blighted landscape and little in the way of fine art. But as Jones and others have pointed out, the Spanish city of Bilbao had a similar image problem until the Solomon R Guggenheim Foundation decided to build a museum there in the 1990s.

It is hoped that the V&A’s arrival will help transform Dundee from the home of jute, jam and journalism into a culturally hip city in the same way the Guggenheim is credited with enlivening Bilbao and reversing two decades of economic decline.

A feasibility study by the Whetstone Group, the London-based consultants, and Conran and Partners claimed that the Dundee museum could generate an extra £18m annually for the local economy, attract up to 130,000 extra tourists a year and create almost 900 jobs. Further benefits will be outlined at a public lecture organised by the University of Dundee later this week.

However, Jones warns that the V&A alone cannot turn around a negative perception of Dundee. It will work best as part of wider investment and development.

“Bilbao is not just about the Guggenheim,” he says. “It has undergone a complete redevelopment of its rundown industrial areas. The city has been completely transformed by a long-term programme. In the early 1990s, Bilbao had 30% unemployment — Dundee isn’t in that kind of trouble. In Dundee some changes have already been made and what we would hope to do is add to these changes. Can we learn from Bilbao? Yes, of course. There is always something to learn from success stories.”

Jones, who until eight years ago was director of the National Museums of Scotland, has visited Dundee. He is a fan of Dundee Contemporary Arts, the city’s creative hub, which he believes has had a significant impact on the city and hopes that the V&A can work alongside DCA in the future.

He also knows the arts scene in Scotland and is quick to point out that he doesn’t anticipate any rivalry between the proposed design museum in Dundee and Scotland’s existing centre for architecture and design, the Lighthouse in Glasgow. “I don’t think there’s much competition between Glasgow and Dundee. Scotland has room for both places and we would like to develop a collaborative relationship with the Lighthouse which is an interesting and lively place.”

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