A £15M war chest is being gathered to boost business growth in the region's rural areas.

Regional development agency One NorthEast's board has approved the funding to address the needs of west Durham and Northumberland.

The improved funding has yet to be fully ratified in the regional development agency's corporate plan, although the proposal is expected to go ahead.

Alan Clarke, chief executive of One NorthEast, said: "We have agreed at a recent board meeting that between 2005 and 2008, we will spend an extra £15m in rural areas.

"There was an acceptance from the board that we needed to deal more with rural areas and the issues affecting these areas."

News of the additional funding comes on the first anniversary of a jobs summit organised in the Wear Valley.

Leaders of business and government organisations were called together by Wear Valley District Council (WVDC) in June last year after more than 900 jobs were lost in the area.

Bob Hope, director of regeneration at WVDC, said the extra funding would be a tremendous boost.

"We have not really had these sort of resources in rural areas through the regional framework. To give it this ring-fenced approach is very beneficial."

Paul Robinson, chief executive of the Wear Valley Development Agency, said the extra funding was excellent news.

He added: "We are very, very aware of the opportunities that there are rurally. One NorthEast is very much up to speed with what is going on.

"There is a pulse going through the dale at the moment. There are a lot of projects looking for funds that would create jobs that would allow the dale to diversify."

Northumberland Strategic Partnership, the body given the task of improving the county's economic fortunes, has completed a strategic review covering the next ten years.

John Litherland, NSP executive director, said: "NSP strongly welcomes the news that One NorthEast is considering a major financial allocation to support rural development over the next three years.

"In Northumberland, we have developed a far-reaching rural strategy and action plan which will provide a first class basis for discussion with the agency about how the new resources can be used in detail."