Chancellor Jeremy Hunt is to set out plans for 12 new investment zones to “supercharge” growth in hi-tech industries when he unveils his first Budget on Wednesday - and two will be in the region.

Officials said the scheme – backed by £80m of investment over five years in each of the new high-growth zones – is designed to accelerate research and development in the “most budding industries”.

Tees Valley Mayor Ben Houchen, who 24 hours ago urged Mr Hunt to revive the policy which had initially been tabled by Liz Truss, said it was 'fantastic news'.

The Treasury said each of the new investment zones will be clustered around a university or other research institution, bringing growth to areas which have traditionally underperformed economically. They will be focused on one of a series of key sectors – technology, creative industries, life sciences, advanced manufacturing and the “green” sector.

Eight areas have been shortlisted - the North East and the Tees Valley, as well as the East Midlands, Greater Manchester, Liverpool, South Yorkshire, the West Midlands and West Yorkshire.

In a statement, Mr Hunt said: “True levelling up must be about local wealth creation and local decision-making to unblock obstacles to regeneration.

“From unleashing opportunity through new investment zones, to a new approach to accelerating R&D in city regions, we are delivering on our key priority to supercharge growth across the country.”

Mr Houchen said: “I have been working closely with Government for months on Investment Zones and I am pleased that the Chancellor has not only decided to revive the policy but could choose Teesside to be one of the first in the country.

“Investment and jobs are the bread and butter of Levelling Up and this I am pleased that with this announcement Government continue to deliver on their promise to the people of Teesside, Darlington and Hartlepool."

Henri Murison, chief executive of the Northern Powerhouse Partnership, said: “This is a marked improvement on the investment zone policy, one which recognises the latent potential in these regions and gives devolved powers more ownership over their future destiny.

“While we’re looking forward to seeing more details on Wednesday, by avoiding a bidding-style competition and going straight to combined authorities, the government has avoided repeating previous mistakes and I have every confidence that this will result in strong proposals being brought forward."