REGIONAL development agency One NorthEast has unveiled plans to create more than 40,000 jobs and 4,000 businesses in the next three years.

The plans are set out in the agency's Regional Action Plan (Rap), a document which looks at ways of improving life in the North-East, from education to transport links.

They include the creation of an urban regeneration company for the Tees Valley.

Mike Collier, chief executive of One NorthEast revealed that permission had been given by the Government for the establishment of the Tees Valley urban regeneration company.

The agency also confirmed that its budget for the year would be £173m, a £20m increase on the previous year.

More of the money will be shared out among the sub-regional partnerships of the Tees Valley, Durham, Tyne and Wear, and Northumberland.

The agency has already approved a capital bidding round of £5m for this year.

The Rap outlines themes that need to be developed in order for the region's economy to thrive.

They include embedding innovation in businesses by developing skills, knowledge and enterprise.

The agency also hopes to nurture the entrepreneurial culture, retaining more graduates from the region's universities and encouraging them to start businesses.

It plans to develop good quality transport links through the creation of an integrated public transport system and by examining ways to improve the region's road and rail network, as well as making the most of its two airports and ports on the Tyne and the Tees.

One NorthEast will also work with its regional partners to develop the rural economy in the wake of the foot-and-mouth crisis.

It will focus on skills development, encouraging diversification and developing better access to information technology.

One NorthEast published its annual report and accounts for the past year, during which, it helped to create or safeguard 15,500 jobs.

Mr Collier said: "Creating 40,000 jobs and 4,000 new businesses is an ambitious target for the region.

"There is little doubt that these delivery targets are impressive and, together with plans to promote enterprise, learning and skills, technology and real interchange between business and academic institutions, they will enable us to provide real and lasting change to the region."