THE man behind the Barnett Formula, which has seen Government money invested in Scotland at the expense of the North-East, said the system was embarrassing and unfair to the rest of the country.

The Treasury formula that gives an extra £1,000 per person to Scotland was introduced in 1978, but has long angered the region's MPs.

Now Lord Barnett has called for his formula to be axed and a fairer system devised.

He said: "I did not create this formula to give Scotland an advantage over the rest of the country when it comes to public funding.

"It is a great embarrassment to have my name attached to so unfair a system.

"It has now lasted more than 20 years, because successive governments have failed to deal with it for fear of upsetting the Scots."

MPs and councillors in the North-East said the system guaranteed the Scots £537 per person more in public spending than the region, producing an annual funding gap of at least £1.3bn.

A Labour spokesman said the Government was not ready to change the formula.

He said: "We are not currently convinced of the need to make changes to the Barnett Formula, as it ensures clarity and transparency in the funding of Scotland's public services."