COUNCIL funding increases hailed as narrowing the North-South divide received a mixed reaction in the region last night.

The Government announced that it would give councils across the country cash totalling £51.2bn in the 2003/2004 financial year, an eight per cent increase.

North-East authorities had hoped the new fairer funding formula would bridge the North-South spending divide.

Ministers say the region will get an extra six per cent compared with 4.5 per cent for the South-East.

Some County Durham councils are to get 12.5 per cent but not everyone in the region is happy.

Tony Flynn, leader of Newcastle City Council and chairman of the Association of North-East Councils, said it was not enough.

"Newcastle City Council has received an extra six per cent in general grant which equates to £18.2m - the national average is 5.9 per cent.

"While the Government has listened to our case, I do not think it has acted with conviction by giving us anything approaching what we need.

"Our education and social services are stretched to the limit.

"We will continue to lobby Government vigorously for more money, but my initial analysis of these figures will mean that as a local authority we cannot rule out fur- ther rises in council tax and cuts in essential services.''

In County Durham, Chester-le-Street, Derwentside, and Easington district councils - former pit areas with pockets of high deprivation - are getting 12.5 per cent increases, as is Teesdale District Council.

North Durham Labour MP Kevan Jones, whose constituency includes Chester-le-Street and part of Derwentside, welcomed the news.

He said: "The Government has clearly listened to what the North-East has been saying and I'm very pleased that we have got an inflation-busting increase."

What is not known yet is whether there will be big increases in council tax bills, although Local Government Minister Chris Leslie said there should not be.

Durham County Council, the region's biggest council, introduced a 14.8 per cent council tax increase earlier this year.

The council is to get 6.9 per cent, £21.5m, from the Government, but a spokesman said it was too early to assess whether it would be better off.

"We are certainly a long way off forecasting what effect it may have on next year's council tax bills."

Who gets what . . .

Chester-le-Street, Derwentside, Easington, Teesdale, Selby, Craven, Blyth Valley, Tynedale and Wansbeck (all 12.5 pc); Ryedale (11.8); Wear Valley (9.9); Sedgefield (8.9); Darlington (8.2); Redcar and Cleveland (8); Hartlepool (7.5); Stockton, Durham County Council (6.4); Scarborough (4.5); Middlesbrough (3.8); Hambleton, Harrogate, Richmondshire (3.2). Police authorities: Durham, Cleveland and Northumbria will each get 4.9 per cent and North Yorkshire three per cent.