SOME of the poorest families in the region will be ordered to hand back millions of pounds overpaid to them in tax credits, it emerged last night.

Figures show families in the North-East and North Yorkshire have been overpaid nearly £90m in the past year. About 114,400 families were overpaid working tax credit and child tax credit.

Although the Government said it would have to write some of the money off, officials are determined to get most of it back.

Yesterday, the system was branded a disgrace by politicians and criticised by the Citizens Advice Bureau (CAB) and the Child Poverty Action Group.

The CAB said thousands of people in the region had been to them with tax credit problems.

They included:

* A North Yorkshire man in his 50s, with heart problems, whose income was incorrectly recorded by the Government. He now faces a £4,000 repayment.

* A disabled woman from Sedgefield, County Durham, who was overpaid because of an Inland Revenue mistake.

Her benefits have now been reduced as a result. The CAB said this was causing her "real hardship."

* A family, also from Sedgefield, whose Christmas was ruined last year when they were forced to repay hundreds of pounds.

A CAB spokesman said: "People find themselves struggling to repay large overpayments without proper explanations of how they have arisen, and without being given notice before recovery starts.

"The way overpayments are recovered needs to be reviewed urgently. People must get proper explanations, be given time to challenge the overpayment and more overpayments need to be written off."

The Liberal Democrats warned that about £30m, or a third of the total owed, would have to be written off as unrecoverable, leaving taxpayers out of pocket.

Recovering the rest, they said, would involve some of the poorest families paying back money they have already spent.

David Laws, Lib Dem treasury spokesman, said: "These figures are a disgrace.

"One pound out of every £5 paid out by Gordon Brown in tax credits has been overpaid.

"Not only has the taxpayer lost out, but the Government is now trying to claw back money from people on very low incomes - even when it was Government mistakes which led to errors.

"For too long, Gordon Brown has let others take the flak for the tax credits debacle. If he wants to show he is fit to be prime minister, he must sort this mess out before he leaves the Treasury."

The Child Poverty Action Group has previously threatened legal action against the Government for the way it recovers overpayments.

Tim Nichols, from the pressure group, said yesterday: "It is reasonable to recover some overpayments, but many families face hardship because an overpayment is taken that they do not believe was their fault, and have not been able to dispute.

"There must be an automatic pause before overpayments are recovered to allow time to dispute it. Recovery, when appropriate, must be at a reasonable rate, and the appeals system must be made fully independent."

A total of 96,000 people were overpaid in the North-East in 2005-06, at a cost of £75m. A further 18,400 in North Yorkshire were overpaid £14.8m.

However, a further 48,000 people in the region were underpaid a total of £27.5m, according to yesterday's figures.

A spokesman for Revenue and Customs, which administers tax credits, insisted better computers were improving the "accuracy" of payments.

He added: "Tax credits provide support to almost 20 million people, including around six million families and ten million children. Since 1997, they have helped lift 600,000 children out of relative poverty."

The tax credits system - Labour's flagship policy to cut poverty - has made many claimants more than £6,000 a year better off, but has been dogged by poor administration.

The parliamentary ombudsman warned information on award notices was poor, while customers seeking help had their letters ignored or encountered engaged telephone lines.

The government has attempted to bring overpayments under control by increasing the income threshold above which a "clawback" is made.