LABOUR has called for a bankers' bonus tax to help fund the Government's flagship job creation fund.

Round two of the Regional Growth Fund (RGF) closes today with about £950m up for grabs.

The first round of the RGF was hugely oversubscribed with 56 projects in the North-East rejected. The Government is braced for another deluge of applications this time around.

The RGFs £1.4bn over three years represents a two thirds cut in the regional investment delivered by Regional Development Agencies, such as One North East, which are being scrapped.

Labours Shadow Business Minister, Gordon Marsden reckons a tax on bank bonuses can boost the RGF coffers by an extra £200m this year.

Mr Marsden said: "This Tory-led Government has shown the North- East that it totally underestimates the scale of the challenge facing the region. By already rejecting 56 bids to the Regional Growth Fund round one, it is clear that they are failing to prioritise growth and jobs across the North East and have instead chosen to cut too far and too fast.

"We believe money and assets intended for the regions should stay in the regions. They should think again on regional growth and support the North East in creating the jobs we need for the future."