Teesside is falling dramatically behind the rest of England in economic performance, a crucial report to the Government will reveal today.

Of the country's 56 urban areas, only Blackburn has a lower gross value added (GVA) per head since 1995, the State of the English Cities analysis has found.

The GVA of the Middlesbrough travel-to-work area, which takes in large parts of Teesside, grew by only 17 per cent over the seven years to 2002, the study said.

In contrast, the average growth across England was 42.7 per cent. Newcastle grew 48 per cent and Sunderland 43 per cent.

The study does not pinpoint the reasons for Teesside's perfomance, but stresses the value of dynamic local leadership and co-operation between local authorities and other partners.

Successful areas can boast large numbers of graduates, have created high-salary jobs and have improved transport and skills.

Although urban areas in the North and West on the whole lag behind those in the South and East, several towns and cities are succeeding in bucking that trend. Derby, Manchester, Liverpool and Sheffield are all growing faster than the average, while southern towns such as Norwich, Ipswich, Southampton and Luton are at the bottom.

Liverpool academic Michael Parkinson, who carried out the analysis, said: "There is a huge amount of evidence that what drives the success of cities is leadership and that we need to trust and support local leadership more."