THE Government's pledge to help struggling North-East councils looked to have backfired spectacularly last night.

When ministers announced a cash pot of £51.2bn for local authorities in the forthcoming financial year, they promised a fairer funding formula for the North.

Officials claimed the region would get an extra six per cent to spend on better services and hold down council tax demands, compared to just 4.5 per cent in the South-East.

But a survey by The Northern Echo has uncovered widespread dissatisfaction among North-East authorities over the cash settlement.

Councillors in the North claim that, far from doing better, they have done worse than the South, which, according to their figures, has received an average of 7.3 per cent.

The changes seem to have given rise to dissatisfaction across the entire country.

Durham County Council said its overall increase in grants was 6.6 per cent, ranking it 25th of the 34 English shire counties.

"The Government is more interested in keeping Middle England happy than it is in helping this region, which has far more problems," said John Shuttleworth, Independent councillor for Weardale.

Wiltshire topped the list with 11.8 per cent, followed by Cambridgeshire with 11.5 per cent and Warwickshire with 10.6 per cent.

Cuts in services and job losses may have to be made unless the Government increases funding for Durham in the final settlement, due to be announced early next month.

A nine per cent rise would add about £50 to the £551 the county council gets from households in Band A properties, the biggest category in the county. The rise in Band D would be £74 to about £902.

District council, police authority and, in some cases, parish council precepts have to be added to the bill, which are also likely to increase.

Elsewhere, Newcastle City Council is working towards a 9.9 per cent council tax increase allied to job losses and a reduction in home care services for the elderly, blaming its poor funding settlement.

Redcar and Cleveland Borough Council tax for Band D is £1,098,47. Council leader Dave Walsh anticipates that the authority will not raise its share of the tax for the third year running. The police authority precept is currently £96 for Band D.

The new police authority rate has not been set but it is not expected to be as big a rise as was previously feared because extra Government money has become available.

The bill for North Yorkshire, England's largest county, is predicted to go up by about 9.5 per cent in April and public consultation is under way.

The Government believes that North Yorkshire County Council should be spending about £35m extra next year, but the authority says it needs to fill a £19m gap.

Passing that on to householders would lead to an increase in council tax of about 11.5 per cent - a figure council leader John Weighell has called unacceptably high.

"We don't believe people can afford increases of the kind being suggested," he said.

As a result, the county is proposing a rise of 9.5 per cent.