WORK began yesterday on the first major part of Teesside's Digital City project, which could create up to 300 jobs and 130 companies within three years.

The ground was broken for the £12m Institute of Digital Innovation, at the University of Teesside - the first step in a scheme to make the North-East a world-class centre for animation, computer games and digital media.

The developments, in Woodlands Road, Middlesbrough, will give computing, media and design students the opportunity to study together and provide a nerve centre for Teesside's DigitalCity project.

The Institute of Digital Innovation will be home to the Digital City project team and include specialist digital sound studios and screening rooms.

There will also be accommodation for digital technology companies, research and development commercialisation teams working with academic researchers and the Digital City fellows.

The second building is the £9m Centre for Creative Technologies, which will provide studio space for teaching and learning in digital design and will bring computing, media and design students together.

Professor Graham Henderson, vice-chancellor of the university, which has been working with regional development agency One NorthEast on the project, said: "Together these two buildings will make Teesside a premier location for both studying digital media and technology and for creating new digital businesses."