AN extra £149m would be available to spend on local services if North-East councils were funded the same way as their London counterparts.

The claim, by the Association of North-East Councils (ANEC) forms part of its formal submission to an inquiry by Sir Michael Lyons, which is looking at changes to the way local government is financed.

The association, which represents 25 councils, yesterday held a seminar at Darlington Borough Council for council leaders and finance chiefs, in which they were told to lobby to win a fairer deal for the North-East.

They say the North-East has the highest level of deprivation of any region in the country and draws the least amount of income from council tax, so the proportion of funding from central Government should be higher than for any other region.

ANEC says London authorities receive a greater proportion of Government funding than those in the North-East, despite being significantly less deprived.

Paul Woods, treasurer of Newcastle City Council, told the seminar that councils were facing substantial rising costs in areas such as social services which were not being reflected in increases in Government grant.

He said: "We need to lobby long and hard as nothing in this consultation has yet been agreed."

Councillor Mick Henry, chairman of ANEC, said: "We are just aiming to present solid, sound arguments to support our position."

Local Government Minister David Miliband, who is MP for South Shields, has the job of implementing recommendations made by the Lyons inquiry.