THE fight was on last night for the North-East and North Yorkshire to win a share of 20,000 Civil Service jobs which Gordon Brown confirmed were moving out of London.

The Chancellor announced that government departments had identified a total of 20,030 posts to be relocated to the regions over 15 years, as demanded by an independent study.

The Department of Environment and Rural Affairs led the way by pledging to move 250 jobs to Yorkshire, although it would not reveal exactly where.

But only 950 jobs - seen as a powerful driver of economic growth - have so far been found new homes. It leaves the destinations of 19,080 still to be decided.

A study earlier this year, by property consultants King Sturge, picked out Middlesbrough, Stockton, Sunderland, Newcastle and North Tyneside as good alternative locations.

Speaking in the Commons, Mr Brown said: "I know that towns and cities across the country will want to make their case.

"I can also announce that, for all departments making future job decisions, our policy will be a presumption in favour of location in the regions."

About 230,000 civil servants, about a third of the total, are based in London and the South-East, a tally that has grown by four per cent since 1997.

Most are expected to remain in the area even if their posts are relocated - creating highly-prized vacancies in regions with higher jobless totals.

Yesterday, unveiling three-year spending plans, Mr Brown announced his own Treasury department would shift 5,000 jobs out of the South-East.

A further 4,000 will move from the Department for Work and Pensions, 3,900 from the Ministry of Defence and about 1,000 each from health, education and trade and industry.

Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton councils had joined forces to argue for an entire government department devolving to the North-East.

But, in the event, Darlington and Gateshead - as well as York and Harrogate - missed out on a recommendation.

The Chancellor also announced tens of thousands of civil servants would face the axe to boost spending on frontline services.

Mr Brown told MPs that a total of 84,150 jobs would go in the civil service, with a further 20,000 to be cut from the devolved administrations in Scotland and Wales and the Northern Ireland Office.

He said the cuts in "back office" jobs would save £21.5bn-a-year, helping to fund "the longest sustained investment in public services for a generation".

The Tories, however, dismissed Mr Brown's statement as a "manifesto for fat government and fake savings".

The Public and Commercial Services Union said that cutbacks on such a large scale would cause "carnage" and threatened industrial action.

General secretary Mark Serwotka said: "When this Government was elected they imposed the windfall tax to pay for initiatives like the New Deal. Now they are using their own workforce to pay for their policies.

"In light of such attacks on hardworking civil servants we will be consulting our members, taking our case to the wider trade union movement and to the users of public services in order to mount the most vigorous defence of our members' jobs."

The Chancellor said that overall, departmental spending would rise by £61bn to £340bn in 2008, of which £37.5bn had already been allocated to health and education.

Spending on national security would rise from £1.5bn to £2.1bn by 2008.

Two-year-olds in 500 areas of the country will receive free nursery education and £100m from capital funds will go towards building new children's centres.

Local councils will get three-year budgets to help them plan ahead and care alarm systems would be installed in the homes of an extra 160,000 pensioners.

Plans will be unveiled next week by Home Secretary David Blunkett for an extra 20,000 community support officers by 2008.