THE chairman of One NorthEast has hit out at business leaders after they accused the regional development agency of neglecting local firms.

The Confederation of British Industry (CBI) North-East says the agency should concentrate more on helping the region's businesses instead of treating them like second class citizens.

The agency also comes under fire for trying to do too much instead of concentrating on specific areas.

But One NorthEast chairman John Bridge said: "I find their accusations utterly astonishing. I had a meeting with the CBI only last week and, as far as I was concerned, it was a positive one.

"There has never been a suggestion that local firms are not getting grants.

"I felt we gave them good answers to the issues raised during the meeting."

He was responding to a statement, released by the CBI today, expressing concerns about the higher priority given to support for inward investment compared to established companies.

Paul Briggs, chairman of their regional policy group, said there was a considerable amount of concern among many existing businesses that they were often treated like second class citizens.

"There are even examples of existing, growing companies offering excellent employment potential being ignored while help is offered to their overseas competitors. This is a nonsense," he said.

The CBI also urged One NorthEast to try harder to break down barriers between universities and business and to simplify the number of business support initiatives.

Regional CBI chairman Sir David Chapman said: "The plethora of different bodies is causing serious difficulties for many small firms.

"Small businesses looking for support simply don't know where to start anymore."

But he added: "One NorthEast has already started to address this issue and the CBI will give its full support."