FEARS that the Government's flagship job creation fund could fail to solve deep-rooted problems in the region has prompted members of its advisory board to call for it to be extended.

Sir Ian Wrigglesworth, deputy chair of the panel overseeing the £1.4bn Regional Growth Fund (RGF), said that three years was not long enough for the scheme to boost flagging confidence and heal the wounds of unemployment.

Prime Minister David Cameron and his deputy, Nick Clegg, launched the fund to help spread wealth to the North and reduce the region's dependence on public sector jobs. Labour has argued the fund fails to disguise a £1bn per year cut in support for regional development which has followed the decision to abolish regional champions of growth and inward investment such as One North East.

The Tees Valley secured about £57m from the first round of the RGF last month, and the next phase will close at midday on July 1 when £950m of cash is allocated. A final round will follow to distribute any remaining funds before the scheme is closed.

Sir Ian, the Port of Tyne chairman and a former Liberal Democrat MP for Teesside Thornaby and Stockton South, reckons money must be found to continue the job that has been started. He said: "Many of the big physical regeneration schemes in the past have succeeded in tackling the scars of industrial decline, for example, but haven't necessarily tackled the scars in peoples heads, which, for me, is what regeneration is all about.

"This is not a problem that is going to be solved overnight. There is no question that we need longer than three years to get the job done."

RGF panel member Lord Shipley, the former leader of Newcastle City Council, said: "My feeling is that the RGF will have to be extended beyond its three-year lifespan and I very much hope that the Government will look at this."

Stephen Catchpole, Managing Director of Tees Valley Unlimited, the area's Local Enterprise Partnership, which is helping businesses and local authorities to submit applications to the fund said he would welcome an extension to the RGF. "We are working in accordance with the guidelines set by Government which is that the Regional Growth Fund has a three-year life span. Of course we will be delighted if the Regional Growth Fund were to be extended to provide additional funds in the future," he said.

Lord Heseltine, Mr Cameron's regeneration chief is currently touring the country to encourage bidders to compete for the second round of the RGF which is expected to be hugely oversubscribed.