AN ECONOMIC lifeline aimed at creating 150 new jobs in the surrounding area was launched in Barnard Castle yesterday.

The Teesdale Enterprise Fund has been set up with a £750,000 donation from Glaxo Smith Kline.

The pharmaceutical company caused dismay last year when it announced it was planning to reduce jobs at its local operation - the area's main employer.

It later announced a £1.2m commitment to the community to offset the loss of 400 jobs, which will be phased out by the end of next year.

The initiative is intended to create sustainable job opportunities and it is expected that at least one new job will come out of every £5,000 invested by the fund.

Applications for funding are open to people wanting to start businesses; existing businesses looking to expand and public, private or voluntary organisations offering long-term job opportunities.

Start-ups and existing businesses from all industrial and commercial sectors can apply.

Jonathan Box, Barnard Castle site director for GSK, said the company wanted to do whatever it could to lessen the impact on the community.

"We believe the £1.2m we have committed will help and we see the enterprise fund as an effective way to stimulate new long-term jobs in Barnard Castle and Teesdale.

"I would encourage anyone with ideas that will create new jobs to get in touch with the County Durham Development Company or the Teesdale Enterprise Agency to discuss potential funding."

Mark Lloyd, managing director of the CDDC and director of economic development and planning with Durham County Council, said: "The economy in the more rural areas of County Durham can be fragile.

"As many of the employees travel in to GSK from the surrounding small towns and villages, any job losses can affect the entire dale.

"So the fund offers a vital economic lifeline to Barnard Castle and Teesdale and we applaud GSK's commitment, which helps provide the resources to bring real employment and regeneration prospects to this part of County Durham.

"The county has two great resources - its people and its natural environment - and the fund can help build on both these strengths."

The launch was attended by Derek Foster, MP for Bishop Auckland, who said that while it was regrettable that GSK had to shed jobs to remain competitive at Barnard Castle, the region appreciated the company's efforts to mitigate the effects on the local economy.

The maximum support available towards any single project will be no more than 50pc of the total costs and will generally need match funding from other public or private sources.

The £450,000 balance from GSK's £1.2m commitment will be used by the company to directly support staff who suffer from job losses.