CLAIMS that North Yorkshire could lose out on millions of pounds in European cash because it isn't spending it fast enough have been denied by the county council.

Labour politicians on the authority fear that more than £4m is in jeopardy, money that was intended to give a cash injection into declining rural areas.

The Yorkshire and Humber region won a large package of Objective 2 cash under European Regional Development Fund two years ago.

It is divided into different priorities, one of which is to help develop the infrastructure of sites for economic purposes, and a certain amount of money must be committed towards different projects each year.

But according to the Labour group's spokesman for economic development, Councillor John Ritchie, about £4m of the package has yet to be committed.

He warned that the money must be spent or it would be lost to urban regeneration.

"The Executive of North Yorkshire County Council is now aware of the cross-party concern on the possibility of losing out on these much-needed funds.

"If the county does lose out on these funds, it will be rural communities who will suffer," he said.

Among projects now being considered is the £2m Army museum at Catterick and more commitment to property grants.

A spokesman for the county council insisted there was no funding crisis and that all parts of the Yorkshire and Humber Objective 2 region were taking longer than planned to get infrastructure projects going.

He said council officers and the authority's partners were achieving some success.

The spokesman said: "Our target is to commit £13m by the end of this year and 60 per cent of that total by the summer.

"So far, our commitment level is some £4.8m, or 37 per cent, compared with about 15 per cent for the Yorkshire and Humber region as a whole."