ALAN Milburn has revived hopes of a tram system serving the North-East by calling for it to be the centrepiece of plans for economic revival.

The Darlington MP and former cabinet minister said extending light rail to County Durham and Tees Valley was exactly the type of big project the region needed.

Mr Milburn shrugged off recent Government rejections of light rail applications in Liverpool, Manchester and Leeds, insisting they need not stand in the way of a North-East bid.

He said: "We have a low level of car ownership, which means people are reluctant to travel from Darlington to Hartlepool for work and vice- versa.

"Therefore, we need to be looking at whether we can build on the success of the Tyne and Wear Metro and build a regional mass transit system."

Urging North-East policymakers to think "big and bold", Mr Milburn added: "It's no good scrabbling around for £5m or £10m - it's £1bn that will make a difference."

The former Health Secretary was explaining the purpose of the first North-East Economic Forum, which will be held at Hardwick Hall, Sedgefield, County Durham, on November 18.

Endorsed by Tony Blair, it will bring together leading figures from business, education, the public sector and voluntary organisations to draw up a manifesto for economic regeneration.

Plans have been drawn up to extend the Tyne and Wear Metro - the UK's first light rapid transit system, serving Sunderland, Newcastle, Gateshead and parts of North and South Tyneside.

Under Project Orpheus, trams would be introduced on 29 North-East routes, including Newcastle to Denton, Killingworth to Cramlington, Sunderland to Seaham and South Shields to Sunderland.

Nexus, the passenger transport executive, has also suggested it would like to see a proposed light railway system in Middlesbrough connected to the Metro.

But Nexus has admitted the proposals would "require huge sums of money"- cash that has looked less attainable as the Government pulled the plug on proposed schemes elsewhere.

Only 12 of the 25 light rail lines planned by 2010 have been developed, amid hints from ministers that they would prefer to invest in more buses.

Meanwhile, Nexus and Tyne and Wear's five district councils are lobbying for £500m of extra Government investment over 20 years to stop the Metro grinding to a halt.

Nevertheless, Mr Milburn said he hoped the forum would draw up an ambitious manifesto, ahead of the next multi-billion pound Government spending review in 2007.

Another idea was for the North-East to bid to become the first region boasting "wireless broadband" links