THE North-East still has the highest levels of unemployment in the country, official figures showed last night.

The amount of people claiming unemployment benefit dropped to 81,000 from last month's 83,000 - but still showed that 6.8 per cent of the population were out of work.

It was a drop on last month's figures but an increase on the last quarter, with 4,000 extra people out of work.

The North-East Chamber of Comerce last night welcomed the data, which it said showed employment was on the rise in the region.

Figures from the Office for National Statistics (ONS) showed a further 9,000 people were in work in the North East in comparison to a year ago.

The official figures show that unemployment has also risen by a similar amount.

George Cowcher, NECC chief executive, said: "Data released over the past few months has painted a confusing picture of the labour market as Government initiatives have encouraged people off long-term benefits.

"Widening the pool of people available for work is extremely positive and the benefits are being seen in the fact that we are getting more people into jobs."

The Government last night welcomed the national figures, which showed record numbers in work but it announced a probe into why people were claiming unemployment benefit for longer.

Official figures showed a UK employment level of 28.76 million, the highest total since records began in 1971.

But the claimant count, those receiving jobseeker's allowance, increased for the eighth month in a row, up by 8,200 in September to 875,500.

The figure is 61,700 higher than at the start of the year, and the highest for 18 months, according to ONS data.