The Government has been warned that hundreds of millions of pounds of public cash needs to be invested to prevent northern inner-cities becoming desolate wastelands.

An official report by a Labour-dominated committee of MPs amounts to a devastating attack on Government housing policy.

The Transport Local Government and the Regions committee demands ''radical intervention'' in urban areas where the housing market has collapsed.

A massive curb on new housebuilding on greenfield sites is called for, along with much more emphasis on restoring housing markets to stop low demand spreading to ''at risk areas''.

Unless action is taken, the report concludes: ''The alternative is that our northern cities will consist of a city centre surrounded by a devastated no man's land encompassed in turn by suburbia.

''In inner urban areas disadvantaged residents will increasingly see their standards of living diminish even further, and the costs to communities, businesses and the public services increase.''

During its inquiry the MPs were ''shocked to see tha scale of the problem of empty homes, with row upon row of terraced houses lying abandoned.''

Letters to the committee detailed the desperate problems people face - unable to sell their homes, with negative equity and very high crime rates, anti-social neighbours and collapsing local services.

One Hartlepool resident said: ''After 30 years in my terraced home, my house went up for sale, only to hear time and time again 'the house is no problem, shame about the street.''

A resident from Easington Colliery added: ''It is not always the houses that are the problem but the people that the private landlords inflict on us. But of course when an area is run down with derelict homes, decent people start to move out." The Labour Chairman of the committee Andrew Bennett said: ''This is a massive problem and getting worse."

The report criticises regional development agencies for pursing a narrow economic agenda which takes insufficient account of social regeneration. It also blasts the Government for "assuming every neighbourhood can be saved without looking at the long-term viability of an area'' and councils for ignoring central Government advice.