LABOUR'S flagship scheme to raise the incomes of poorer people has been branded a shambles by one of its North-East MPs.

Durham North MP Kevan Jones condemned the "unacceptable" treatment of many of his constituents, who had been told they must pay back money received as tax credits.

The backbencher highlighted four cases of people issued with overpayment notices months after they had received their income top-ups.

All were mistakes made by the Inland Revenue, yet the claimants were told they must pay back money they had already spent within their family budgets.

The cases were:

* Mark McGough and Victoria Kerry, of Catchgate, near Stanley, County Durham, whose payments ended without warning in December, because the Inland Revenue wrongly said they were not in work.

* Mr and Mrs Hall, of West Pelton, near Chester-le-Street, County Durham, whose payments were stopped with no explanation for the alleged overpayment.

* Julie Simm, of Perkinsville, near Chester-le-Street, who received a notice after the Inland Revenue took six weeks to respond to a letter from her, in which she told the office she was being overpaid.

* Mr and Mrs Armstrong, of Chester-le-Street, who alerted the Inland Revenue when they received two payments in one month. They were told it was correct, but were later told they had been overpaid.

Mr Jones said: "It is unacceptable for people to be treated in this way.

"They have not tried to manipulate or hoodwink the system. They have been open and honest and have got into these situations through no fault of their own."

In reply, Treasury Minister John Healey said the Inland Revenue would waive the overpayments of anyone wrongly advised their credit was correct. He also pledged to investigate cases.

He also said a shake-up of the way checks of applications were made would clear the backlog of cases by the summer.