SEVEN of the region's Labour MPs have had funding axed by a trade union as a protest against the "privatisation" of public services.

Unison - which is the Labour Party's biggest financial backer - said the MPs would no longer be bankrolled unless they agreed to "stand up for the union's values".

The union, which represents millions of workers across the public sector, is furious about government plans to part-privatise Royal Mail, as well as the "market testing" of NHS services.

Dave Prentis, its general secretary, won a standing ovation from its conference in Brighton when he said his members were tired of "feeding the hand that bites them".

He told delegates: "I call on our labour link to suspend all constituency development payments.

"We should only work with, and support, trade union MPs who also stand up for our values and ensure that any Labour party manifesto does not continue the privatisation of our public services.

"The Government says the solution is to hand larger and larger chunks of our public services over to private companies that will always put profit before public interest. Absolute lunacy."

Among the 64 constituency parties funded by Unison are seven in the North-East and North Yorkshire; Redcar, Stockton North, South Shields, Blaydon, North Tyneside, Tynemouth and York City.

It means that Vera Baird, the Redcar MP, who is also the solicitor general, will lose funding unless she opposes her own Government's sell-off of Royal Mail.

Unison gives more than 100,000 every year to the 64 constituency parties, which works out at around 1,600 for each of them.

Also under threat is the 1m Unison gives to Labour's general election fighting fund, although the union said it was not breaking its alliance with the party.

Mr Prentis said the Government had undermined the public finances by its multi-billion pound bank bailout and done nothing for Labour's core supporters.

Its future plans to "market test" NHS services were something even the Thatcher government had shied away from, he added.

Eric Pickles, the Conservative Party Chairman, said the Unison announcement exposed "the dependence of the Labour Party on handouts from the union barons".

He added: "It will clearly force the near bankrupt Labour Party into adopting policies that are even more out of tune with the wishes of the British public."

Earlier, at the GMB conference in Blackpool, Gordon Brown tried to rally its members behind his Government, insisting the Labour movement had to "work together" to win the next election.

A Tory victory at the next election would threaten investment in the NHS, schools and social care and endanger the significant improvement in public services since 1997.

Mr Brown said: "We must fight as we have never fought before for our public services."