RUSSIA'S gas pipeline dispute with the Ukraine could add to the headache of rising energy prices for the region's businesses.

The North East Chamber of Commerce (NECC) warned last month that rocketing fuel bills were threatening productivity in the region, which in turn would hit employment and business growth.

The stand-off between Russia and the Ukraine hit mainland Europe directly - but the NECC said it was concerned the ripple effect would be felt across the Channel.

Before Christmas, Terra Nitrogen suspended production of ammonia at its Billingham, Teesside plant due to high energy costs, and said it would not start producing again until gas costs fell.

But a spokesman for the Wilton International chemical site said yesterday he was not aware of any other companies having to suspend production.

Stan Higgins, chief executive of The North-East Process Industry Cluster (Nepic), which represents the interests of hundreds of chemical and pharmaceutical companies in the region, said energy costs were a problem which could ultimately affect investment in the region.

But he said he was not aware of any more companies having to suspend production due to rising gas costs in the past few weeks. Nepic members are meeting Trade and Industry Secretary Alan Johnson in the next fortnight and Mr Higgins said energy prices would be top of the agenda.

NECC policy director Andrew Sugden said yesterday: "The UK is already on the receiving end of vastly inflated prices, much more so than the rest of Europe, and any impact from this dispute will further compound the issue.

"This situation highlights the importance of the Government's forthcoming Energy Review. The UK Government needs to find a real and lasting solution to our dwindling energy resources."