CONTROVERSIAL laws that stopped the creation of university businesses were amended by Chancellor Gordon Brown in his Pre-Budget Report yesterday.

Regional development agency One NorthEast and the University of Newcastle, which earlier this year said the tax laws were stifling its potentially lucrative spin-off businesses, welcomed the change.

Such spin-offs are at the heart of One NorthEast's strategy for success and could create hundreds of jobs.

Durham University, which created Bede Scientific Crystals, had delayed new ventures until the tax regulations were amended.

Paul Christian, head of tax at North-East law firm Ward Hadaway, said the proposals for tax relief on academics setting up companies had been put out to consultation, and it was hoped that legislation would be introduced in next year's Budget.

The rest of Mr Brown's pre-budget statement received a mixed reaction from business leaders yesterday.

John Wright, North-East policy chairman for the Federation of Small Businesses, said: "We are pleased that the Chancellor has not resorted to gimmicks and has resisted more tweaks to the tax regime that would have led to further confusion for Britain's entrepreneurs. But the proposals on maternity leave have clearly been made with a General Election in mind and with little thought to the impact on small employers."

George Cowcher, chief executive of the North-East Chamber of Commerce, said: "Gordon Brown has delivered a number of interesting proposals that make us cautiously optimistic. But, as is always the case with these announcements, the devil will be in the detail.

"The announcement of a freeze on fuel duty was a welcome one as we must not put transport-reliant companies on the back foot by overburdening them with taxation.

"New measures to simplify taxation for smaller businesses are also to be applauded."