MAJOR funding has been pumped into the key area of science and innovation in an effort to transform the North-East into a centre of excellence, industry leaders were told yesterday.

One NorthEast, the regional development agency, has allocated £200m over the next five years to encourage firms to work with universities and other firms.

They also hope to use the cash to secure up to £750m of European funding, which will be used to enhance the region's use of technology in business.

Lord Sainsbury, Science and Innovation Minister, gave a keynote address to 150 delegates, including North-East assembly members, business leaders, academics and key policy makers, at an event in Billingham.

"Innovation is critical to the success of British business and wealth creation in the future, and this is a hard economic fact," said Lord Sainsbury.

"Government, industry, universities and schools need to work together to create the best possible conditions for innovation in industry, to put innovation at the centre of corporate strategies, and to convey to young people the excitement and challenges of the advances taking place today in science and technology."

One NorthEast and the Science and Industry Council have developed an action plan titled Strategy for Success and are creating five centres of excellence in areas of technology identified as having potential for world class strength.

They include digital technology and media, life sciences, renewable energy, nanotechnology and process industries.

The centres are supported by NorthSTAR, which provides access to finance, intellectual property, rights development and business development.

Industry chiefs hope such a pragmatic approach will help secure the future of existing businesses while encouraging an entrepreneurial spirit to develop as the industries grow.

Bob Coxon, Science and Industry Council member and senior vice-president of ICI, said the strategy was key to ensuring the region can compete on the world industrial stage in the 21st Century.

He said: "The North-East must work together to the common agenda and be constantly looking outwards to measure our performance and set our standards by international comparison. We must now move faster and maintain focus to deliver a sustainable knowledge economy built on science and innovation.

"The good news is that we have made a great start."