THE Prime Minister Tony Blair yesterday unveiled a report highlighting a growing economy in the North-East - but one still beset with problems.

While there had been improvements in the region's economy since Labour's coming to power, Mr Blair acknowledged it was still not as good as it could be and there was still a lot of work to be done.

Mr Blair was speaking, along with Health Secretary Alan Milburn and Trade and Industry Secretary Stephen Byers, at Northumbria University, Newcastle, in the first of a series of speeches on the choices facing Britain.

Mr Blair said: "We are well aware the region faces serious social and economic problems, and Government policy is directed towards addressing them.

"Contrary to the way it is often reported, I've never said there is no North-South divide.

"I've simply asked people to understand we attack poverty and other problems wherever they exist.

"As the report published by the Government Office for the North-East shows, there is real progress on crime, education and now on health too.

"So there is progress. But there is still too much poverty, for us, too much educational under-achievement."

Highlighting areas of progress, Mr Blair said Government investment in the region had seen nearly 300 more teachers than two years ago, hospital waiting lists down by 12 per cent, five new hospital projects, more than 1,000 more nurses and 240 more doctors.

And employment was up by 23,000 in the region, with unemployment down by 10,000, he added.

Mr Blair went on to Newcastle United's St James' Park where he opened theclub's learning centre and then on to open offices in Central Square, Newcastle