TONY Blair's government threw its full weight behind plans yesterday to create 10,000 jobs in one of the North-East's worst economic blackspots.

Regions Minister Hilary Armstrong confirmed she will be taking the lead in the £700m Arc project to regenerate areas of Wearside.

Sunderland-born Mrs Armstrong, MP for Durham North-West, will chair a new committee to drive forward the scheme designed to pull in public and private finance.

Mrs Armstrong said last night that this was the first time the Government had come out in favour of the project.

"We want to support the proposals," she told The Northern Echo.

The breakthrough - along with hopeful signals for the £12m bid to reclaim the former Lambton cokeworks - came after Houghton and Washington East Labour MP Fraser Kemp appealed for fresh help for the Sunderland economy.

In a debate at Westminster, Mr Kemp said that with the decline of shipbuilding and mining, the North-East had probably undergone the most dramatic economic transformation of any region in the UK.

He asked for help with the massive Arc regeneration project which aims to transform areas between the A19 and the port of Sunderland.

The 15-year plan, which includes proposals for more than 1,000 houses in the city, was commissioned by Trade Secretary Stephen Byers after the closure of the Vaux brewery and the Groves Crane site.

The scheme is being master-minded by the Arc Regeneration Company, chaired by John Bridge, who is also chairman of the One NorthEast development agency.

Environment Minister Beverley Hughes said funding to reclaim the Lambton cokeworks could be identified after One NorthEast studies had finished.