THE North-East could become a world-class centre for animation, computer games and digital media as the first plans were unveiled for a "digital city" yesterday.

Nearly 300 jobs and 130 companies will be created over the next five years in Middlesbrough as part of the £11m Institute of Digital Innovation, which will be built in the town.

Project director Janice Webster, of the University of Teesside, said: "By 2010, our goal is to create a self sustaining project, boasting world-class people and projects, with a brand that is a byword for innovation, daring and excellence.''

The four-storey institute will carry out research and concept testing for new digital inventions.

It is hoped that a "super" cluster of digital technology and digital media businesses, both new businesses and those spun out from university research, will follow in the wake of the Institute.

The university already provides an "incubator" unit of small offices where start-up businesses can grow.

Work on the glass-fronted centre will start early next year and be complete next summer.

Alan Clarke, chief executive at regional development agency One NorthEast, which is providing £6m of the cost, said: "It's all about building industry for tomorrow. I think its benefits are far reaching nationally and internationally.

"I think it's significant for the whole region. Increasingly, we have first class and world-class facilities in the region and this will be one of those. We have not been as good in the past about shouting what we can achieve, from the rooftops.''

He said jobs in digital technology were already replacing those lost in more traditional industries - and the sector was seen as a strong part of Teesside's future economy.

The University of Teesside is already strong for digital technology courses and as a result it has a number of successful companies, some selling computer games to Sony and Microsoft.

Mrs Webster said Teesside was already attracting worldwide attention as a centre for digital arts.

Institutions in Canada and China have opened working links with the Middlesbrough university, which hosts the Animex animation festival each year.

A nine-minute animation film produced by students at the university has already won an award for the Best British Animation at the Edinburgh Film Festival.

The animation has also been selected to tour seven major German cities including Frankfurt, Cologne and Berlin.

University vice-chancellor Professor Graham Hender-son described yesterday's announcement as "a very important day for the social, economic and cultural regeneration of the Tees Valley".