NORTH-East workers are "significantly better off'' than their higher earning cousins in wealthier parts of the country, according to a firm of management consultants.

The Hay Group claims its research shows that the north-south divide, long a source of discontent in this region, has ended because better paid workers in the South-East struggle to keep pace with their higher cost of living.

The company says that people in the North-East, along with the Scots, enjoy "relatively generous salaries'' and lower living costs.

"The North-East experiences a 5.8 per cent lower cost of living, while pay at most levels is significantly higher than the national average. Real wages average out to just under one per cent the national norm, making the region the third most affluent in the UK.''

The best off live in Inner London, where employees of all levels are four per cent better off compared to the national average real wage despite the capital's notoriously high property costs.

But workers in other parts of the South-East, who do not get such high salaries as their London counterparts, are six per cent worse off than the national average in real terms, according to the company.

The company came to its conclusions after analysing pay databases for both graduate and non-graduate workers and information on living costs in all parts of the country.

"Contrary to stereotype, good salaries in Scotland and the North, combined with more reasonable costs of living, are affording northern employees the best standards of living in the country,'' said Hay Group reward consultant Ben Frost.

"Ambitious northern firms should have no problem attracting talent from the cash-strapped South.

"Employers in the North are offering their workforces a better standard of living and they should be shouting it from the rooftops,'' he added.

But Eddie Goudie, an organiser in the North-East for the GMB union, dismissed the firm's findings, saying: "There is still a north-south divide.''

He said many of the people he represented were warehouse workers who were bringing up families on "poverty'' wages.

"While housing costs might be more in London and the South-East, things like petrol and food cost the same there as they do up here,'' he added.