AN MP who hopes to be leader of an elected North-East assembly has called for a fairer deal for councils in the region.

Gateshead MP Joyce Quin said that following this week's Government Green Paper on local government finance, which indicated a shift in resources to the North, it was vital to keep the momentum going.

Ms Quin, a former Agriculture Minister, has been a strong backer of plans for devolved regional government in the North-East.

At a meeting in Westminster calling for extra money to be given to deprived councils all over the country, she said she was hopeful that the Government's Green Paper on local government finance would ''move things in the right direction''.

She said: "It is now important to keep up the pressure. Sunderland and Gateshead haven't had the fairest allocation of resources over a number of years and I am keen to see a change to the resources formula. We are keen to work for economic regeneration that the Government has started.''

This week's Green Paper proposed a move away from the current standard funding arrangement for local councils, which bases grants on the population of an area.

Local Government Minister Nick Raynsford said the new formula would take into account separate needs for each council, including education, transport, police and fire.

Ms Quin's comments came as Deputy Prime Minister John Prescott and the Local Government Association agreed for the first time a set of priorities for local government "to improve peoples' lives".

They include raising school standards, improving local economies, the environment and meeting local transport needs. Mr Prescott said: "Publishing an agreed set of priorities is an historic step - the first time that central and local government have sought to do this. It is a significant achievement for the partnership and a good demonstration of us working together."