THE Labour Party is to hold its spring conference in Gateshead in 2005 - bringing £1m to the local economy.

The event will be held in the new arts and conference venue, the Sage, which is due to open in 2004.

The £70m building, designed by Sir Norman Foster, is being built on the south bank of the Tyne. It will hold up to 2,500 people and is designed as a music venue and conference centre.

The decision to go to Gateshead for the three-day conference was announced by Labour Party chairman Charles Clarke. Gateshead was in tough competition with other venues to hold the conference.

Neil Rami, chief executive of Newcastle Gateshead Initiative, said: "You have to build a reputation, and a Labour Party conference is about as high profile as it gets."

Chris Lennie, Labour Party deputy general secretary and northern regional director, said: "This is a commercial decision by the Labour Party to hold its second biggest annual event in Newcastle and Gateshead.

"The decision was made because of the spectacular venue, the hotels and the support services, but most of all because it's a very attractive place for our delegates to come and do business."

John Bridge, chairman of One NorthEast, said: "Winning conferences is ultimately about bringing new jobs for the North-East. It's about big business and big money for the region."

The leader of Gateshead Borough Council, Mick Henry, said of the Sage centre: "This is cultural renaissance delivering regeneration. We've invested in culture - and it's bringing in the business."