3GPP has introduced LTE Femto cells to handle the traffic for indoor users and to reduce the load on the Macro cells. However, the current LTE Femto based system is not able to utilize the spectrum efficiently. Hence, we propose a new spectrum allocation method which dynamically allocates the spectrum between Macro and Femto cells and dynamically inside Femto regions based on user traffic demands. This method is applicable only for enterprise cellular deployments in which, all Femtos are deployed in a planned manner. © 2013 IEEE.