THE Government claims that regional grants over the last year will create 3,800 jobs in the North-East and safeguard 4,300 more.

Figures published by the Department of Trade and Industry say that £86.5 million has been allocated to help investment in the region from private firms.

The DTI's annual report on industrial development says this will lead to over £1 billion of new money being spent by firms in the North-East who are setting up business or planning to expand.

Nationally £400 million has been earmarked for aid to enterprise, including European Community-backed Regional Seclective Assistance.

The report says this has helped create 40,000 jobs and secure 20,000 existing ones.

Launching the report in Manchester, Trade and Industry Secretary Patricia Hewitt said: "This report illustrates how the Government can work with industry to harness the true talent and entrepreneurial flair of our business communities.

"By encouraging enterprise we can boost UK business and productivity and create confident, self-reliant and enterprising regional economies to ensure that the UK is one of the best places in the world to do business."

Conservative trade and industry spokesman Nick Gibb said his party was not opposed to Selective Regional Assistance.