BUSINESSES left disappointed after failing to secure a slice of the Governments Regional Growth Fund (RGF) have been reassured their job-creation schemes could still end up being given the go-ahead.

Despite the region securing about £57m of the RGF, only five of the 27 bids submitted by Tees Valley Unlimited have been successful.

Deputy Prime Minister Nick Clegg, who headed the panel that decided which bids were given the green light, said: "We will be getting in touch with all of the unsuccessful bidders to encourage them they can put a bid into the second round when it opens today. Its like when you dont get your driving test for the first time, you must have another go at it.

"Today is a step towards rebalancing our economy away from an unhealthy overreliance on a small number of industries and a few areas. We need to spread opportunity across the whole country, drawing on our many talents. I know that with the right support these businesses can work with their communities and together play their part in leading the country back into prosperity."

Stephen Catchpole Managing Director of Tees Valley Unlimited the Local Enterprise Partnership that helped to submit bids, said: "The first wave were of such a high standard and Im confident that the quality of those we identify as suitable for the second phase will be just as good."

About 1bn will be available in the second phase of the RGF which means that some of the regions innovative public-private sector bids that failed this time, could see the light of day.

After being deluged with bids, Ministers decided to allocate more than £450m in this round rather than the £250m originally planned, but the scheme has still drawn criticism for being under-funded.

For the firms that have secured money, todays announcement is a cause for celebration.

Cleveland Potash Managing Director Graham Clarke was delighted after hearing that his firm had been backed to the tune of "15m to progress plans for the worlds first commercial production of the mineral polyhalite, which can be used as an organic fertilizer.

"Polyhalite has the potential to make a positive impact on world agriculture while safeguarding the long-term future of the Boulby Mine and providing a much-needed boost to the local and regional economy," he said.

Managing Director Gary Dawson, of AV Dawson, expressed his delight at the award of £1.2m. He said: "We set our stall out in 2005 that we would significantly ramp up the facilities and services we offer to the bio-resources sector and subsea and offshore industries. This combined £9.5m investment will deliver on that promise and provide a tremendous asset for Middlesbrough and the River Tees. AV Dawson was established in Middlesbrough in 1938 and has deep roots in the community. It is good to see investment focused on developing indigenous businesses that are committed to the local area.”

The successes in Tees Valley were mirrored elsewhere in the region with todays announcement expected to create 5,216 jobs and a further 8,367 indirectly.

However, a spokesperson for 1NG the development company formed by Gateshead Council, Newcastle City Council and development agency One North East expressed disappointment to have missed out, adding "Nonetheless, the Science Central project will progress as planned with funding of £16m already secured from partners Newcastle University and the City Council for phase 1, which includes a Gateway Building and infrastructure works. The RGF shortfall will mean that phase 1 needs to reduce in scale, but other funding sources are presently being explored and once weve received detailed feedback from RGF, we will decide whether to resubmit for this project for round 2 funding."

Successful bidders are now subject to a due diligence process, which will establish whether the Government is confident the organisations can deliver on their proposals.

The closing date for round two is noon on July 1.