A GOVERNMENT office has admitted it got its sums wrong - costing a North-East council more than £2m in lost grants.

Middlesbrough Council argued that the Office of National Statistics (ONS) had under estimated the town's population, leading to a reduced level of government grant.

Now the ONS has agreed to revise its census figure, adding 5,800 people to the population - a 4.3 per cent increase.

The increased figure will provide the basis for calculation of Government support for the council until 2011 and it will be backdated for two years.

Coun Nick Walker, executive member for resources, said: "I am delighted the ONS has listened to the reasoned and forceful case which we put to them.

"We pledged to the people of Middlesbrough that we would fight for the resources the town deserves and needs. We have kept that promise - now we must get on with the job of ensuring the extra resources are used wisely.''

He added: "We were very fortunate in being able to rely on excellent support from the Tees Valley Joint Strategy Unit, whose research provided the basis for our case. Their thoroughness has helped us to present the strongest possible case, which ONS has now accepted."

Describing the U-turn as excellent news for the town, Middlesbrough Mayor Ray Mallon said: "It was clear from the research we commissioned, into schools rolls, benefit claims and a whole host of statistics, that the census figures did not add up and that, consequently, Middlesbrough was being badly short-changed."