THE Government should pull the plug on regeneration schemes in no-hope run-down communities, a report says.

The Royal Chartered Institute of Surveyors says the money would be better spent on areas that have better prospects of pulling themselves out of the mire than providing incentives for firms to go to unemployment-hit areas.

But one North-East regeneration chief has criticised the report, saying it proposes "writing off'' communities.

Many millions of pounds of public money have been spent in the region over the years to attract businesses and improve the environment following the demise of heavy industry.

Consett, in County Durham, suffered high employment after it lost its main industry, steel making, in 1980, while former pit villages, particularly in east Durham are still struggling.

The institute's report, Housing the Nation, recommends that regeneration policy should recognise that some communities are not sustainable and that money should instead be spent on areas that could realistically improve.

But Mark Lloyd, director of economic development and planning at Durham County Council, said: "To say to a community you are not worth investing in goes against any sort of social justice.

"We think there are very sound economic reasons for balanced investment across the UK. If you are overheating in the South-East, what's wrong with promoting new economic activity in the North-East.''

Mr Lloyd said unemployment in the county had fallen from 20 per cent in 1986 to about three per cent today.

And he said that former pit villages around Durham City were benefiting from new private housing developments because of greenbelt planning policies designed to protect the historic city.

"The Bracken Hill Business Park at Peterlee was built on a 36-acre council smallholding and is now home to 3,500 jobs. I would challenge anyone to say that's not worth it.''

Joanne Sumner, senior policy officer with the institute, said: "We were talking about the very worst scenarios.

"It might seem a bit harsh from the outside, but we are trying to find imaginative ideas.

"It's not about saving money, it's about directing money where it is most useful. We are saying it should be spent wisely.'