DURHAM County Council's economic regeneration efforts have won praise from a financial watchdog.

The Audit Commission has given the Labour-run authority's economic development and regeneration service a two-star or 'good' rating.

Inspectors say the authority has 'a long and successful track record of physically transforming the county, has attracted 50,000 jobs over 20 years, responds well to change and plays an important strategic role.'

The review, carried out under the 'best value' regime, concluded that the service has promising potential for improvement.

The inspectors say the County Durham Development Company set up by the council to attract investment is well regarded by client companies.

Its strength lies not only in helping bring new jobs, it has a good record in helping protect jobs and businesses under threat 'by proactively intervening in crisis situations.'

It also wins praise for putting in place the infrastructure for the knowledge economy, such as the North-East Technology Park.

Though the county's economic problems remain 'massive' there are promising signs that the council will continue to rise to the challenge.

The inspectors have some criticisms and recommendations to make about the service. The report says: "Low levels of learning and skills and social exclusion are major problems in County Durham and greater awareness of the council's economic regeneration activity would help to raise the aspirations of local people.''

They also say different agencies should work closely together and share priorities that will help individuals and businesses.

Council leader Ken Manton said : "I am delighted that the report gives due recognition to the key role which this authority has played in working for the economic well-being of County Durham. We are proud of what we do. We are proud of what we have achieved and we are proud of the people who continue to help us do it.