THE first round of funding is to be released for a scheme to unite two North-East towns into a single city.

Described by organisers as one of Europe's largest regeneration projects, the plan to combine Stockton and Middlesbrough into one city region was launched earlier this year.

Despite a fanfare of publicity though, no funding has yet been secured for the multi-million pound 20-year project.

However, this week councillors in Stockton are expected to make more than £700,000 available for the scheme, called the Stockton-Middlesbrough Initiative (SMI).

The cash is part of £960,000 awarded to the council two years ago by the European Regional Development Fund (ERDF) for economic regeneration.

So far, Stockton Borough Council has spent only £250,000 of the ERDF money, leaving a balance of £710,000. Council officials are recommending the remaining cash go towards the SMI.

However, this first round of funding will still only represent a tiny amount for the project, which developers say will cost about £250m.

Most of the funding for the scheme is expected to come from the private sector. Middlesbrough and Stockton councils are being asked to match fund 20 per cent of the cost of the project to stimulate private investment.

Drawn up by consultants on behalf of the two borough councils, the SMI will focus on a 3,000-hectare strip of land next to the River Tees, separating the two towns.

At the heart of the development would be an urban landscape, mixing parks and businesses, called the Green-Blue Heart.

The site could also feature a new river crossing and transport station serving both towns.

Stockton Council's cabinet is meeting on Thursday when it is expected to agree to release the funds.