HOUSING in the North-East received a £179m boost yesterday with funds set aside for more affordable homes and to repair existing stock.

The region's private developers and housing associations will bid for a share of £82m over two years from next April to provide cheap homes for rent or purchase.

A further £60m will be spent between next year and 2008 on bringing private sector homes up to scratch and on regenerating rundown neighbourhoods.

Local authorities will receive £36m to achieve the Government's decent homes standard by 2010 in their own housing stock.

There has been controversy because only local councils that agree to transfer their housing to non-profit organisations or "arms-length" companies can receive the cash.

Last month, tenants in Tony Blair's Sedgefield constituency threw out proposals to transfer their homes, to the embarrassment of the Prime Minister who has championed such deals.

Yorkshire was pledged a further £301m, with £138m for affordable housing, £107m for private sector improvments and £56m for local authority housing stock.

But the sums were dwarfed by the allocations announced for London (£2.3bn) and for the South-East (£805m).

Baroness Andrews, the housing minister, said the allocations - called regional housing pots (RHPs) - were decided on advice given by regional housing boards.

The total funding of £5.5bn was an increase of about 20 per cent on the amount being spent between last year and next year, she said.

Baroness Andrews said: "This significant investment reflects an increased focus on helping people unable to afford adequate housing, as well as those having difficulty getting onto the housing ladder."

It is the first time that the main bidding round has been open to developers and other non-registered bodies - a shift away from local authorities and housing associations.

The Government has pledged to build 75,000 affordable homes between now and 2008, to help tackle homelessness and reduce the number of households in temporary accommodation.

But local authorities will have to wait until later in the year to find out how much they will receive for their housing.

The announcements comes as anger mounts over proposals to demolish 1,500 houses in the centre of Middlesbrough.

The town's council claims there are 800 empty terraced houses scattered across central Middlesbrough - and says a falling population means less Government grant for repair.

But residents have questioned the figures and are producing their own report to present to Deputy Prime Minister John Prescott.