A £150M drive to boost innovation and help British firms compete with overseas rivals has been announced by the Government.

A report warned that despite the UK's excellent science base and track record in invention, more needed to be done to exploit innovation for commercial benefit.

Trade and Industry Secretary Patricia Hewitt said the UK would find it increasingly difficult to compete in the global market against countries with low labour costs.

Future success would be won through the exploitation of new ideas, particularly in biotechnology, nanotechnology and information and communication technology.

The North-East has taken the lead in those core areas by establishing five centres of excellence.

Regional development agency One NorthEast has won praise for devising the centres, an initiative that has also been recognised by the Lambert Review, published earlier this month looking at business and university collaboration.

The Centre for Process Innovation (CPI), based on Teesside, has been developing strong links of its own with local universities.

Nigel Perry, CPI chief executive, said: "The Lambert Review acknowledges that the model established here in the North-East, which involves the creation of the Regional Science and Industry Council, and the five centres of excellence, including CPI, is leading the way in driving forward a regional science agenda."