North-East job seekers must be retrained if the Government is to meet its target of full employment in the region, business leaders warned last night.

The claimant count, measured by the Office of National Statistics (ONS), records the number of people claiming Jobseeker's Allowance.

Figures published yesterday showed that, during the three months to April, the jobless count rose by 3,000 to 68,000, or 5.8 per cent of the region's population.

This is the highest unemployment rate outside London.

Kevin Rowan, Northern TUC regional secretary, said: "We have to acknowledge that more concentrated effort is needed to improve our overall employment and activity rates, if we are going to move away from the bottom of the employment league."

There was a similar picture in the Yorkshire and the Humber region, which saw an increase of 7,000 to 116,000 out of work.

George Cowcher, chief executive of the North East Chamber of Commerce, said: "I don't think we should start to panic. But there does appear to be a trend of a gentle rise again in unemployment.

"Once again, it does not tally well with reports from some of the major employers in the region, who are saying it is still very difficult to get hold of skilled labour.

"It still seems to be a matter of how well our workforce is trained.

"There are people made redundant who cannot get back into work because they don't have the right skills."

JobCentre Plus said it could not give a figure for jobs vacancies in the region.

The number of people in work hit 1.12 million, up 2,000 on the same period a year earlier, mainly driven by the buoyant construction industry.

It means 70.3 per cent of the working age population are in work. But another 25.3 per cent remain "economically inactive" - the highest proportion of any region in the UK.

The national jobless total rose by 13,200, to 855,300. The number of jobs in manufacturing reached a record low of 3.2 million, after a fall of 79,000 in the three months to April, compared with a year earlier.

Since the start of the year, the jobless figure has grown by 41,500.

It is the fourth month in a row that the figure has risen - a chain of increases that has not happened since 1992.

The number of job vacancies also fell by 11,500 in the three months to May, to 635,900, but is still 7,500 higher than a year ago.

The data also showed human cost of the collapse of the MG Rover for the first time, as unemployment in the West Midlands increased by 6,000.

More than 5,500 Longbridge workers lost their jobs when it called in administrators in early April.