ANGRY council leaders last night claimed that “unfair and unjust” Government grant settlements would widen the North-South divide as the region’s biggest local authority announced 1,600 job losses.

Town hall bosses accused the coalition Government of acting like “Robin Hood in reverse”

by taking money from deprived North-East communities to give to prosperous southern shires.

The claims were made as Durham County Council revealed it needed to find more than £100m-worth of savings.

Officials said the cuts would lead to 1,600 job losses as well as major reductions in services.

The authority said it was reviewing every aspect of its business, apart from services that must be provided by law.

Areas most at risk are libraries, arts, museums and theatres, welfare rights and information services, youth centres, sports and leisure facilities and communications, including the authority’s “newspaper” Durham County News.

Over the next four years, the level of Government support will be cut by 28 per cent.

More than £11m of Durham County Council’s grant has been withheld by the Government to protect services in other local authority areas – mostly in the South.

The Government’s financial “damping” system – which sets a minimum and maximum grant level for every council – unduly penalises authorities in hard-hit areas.

In addition, grants for job creation and help to povertystricken areas have also been slashed by £25m.

Simon Henig, leader of Durham County Council, said: “It’s like Robin Hood in reverse. The Government is robbing the poor to give to the rich.

“We are talking about service reductions on a huge scale. These services have been built up over decades and the Government is taking the axe to them.

“Sadly, there is no light at the end of the tunnel. This isn’t a one-off. We are expecting the cuts to just keep coming.”

Figures released on Monday had suggested councils would receive a better-than-expected funding settlement for 2011- 12.

But angry councils leaders last night claimed their calculations had found that the cuts would be worse than anticipated.

Darlington Borough Council leader John Williams accused the Government of conning the town.

He said: “The true cut in Government support to our borough is likely to be as much as 11.65 per cent – not the 3.55 per cent that (Communities Secretary) Eric Pickles was saying.

“Cuts of this scale will seriously undermine council services.

And this Government can never again be trusted to provide accurate figures.”

Councillor Williams added: “They trade in smoke and mirrors, not reality, and they have fixed the settlement to favour mainly Conservative councils in the South of the country.”

Middlesbrough Mayor Ray Mallon said the cuts were “too savage and too deep” and threatened to put the borough back a generation.

According to council’s finance experts, the settlement means Middlesbrough will be forced to slash £15m from its spending in the coming year – £1.7m more than expected.

Mr Mallon warned that up to 400 jobs could go as a result and services such as libraries, leisure centres and rubbish collections could be hit.

Mr Mallon said problems faced by a town such as Middlesbrough were in stark contrast to those of Elmbridge, in Surrey, which recently came top in a survey to identify the areas best prepared to deal with the effects of recession and public sector cuts.

The mayor said that under yesterday’s settlement, Elmbridge’s spending power has fallen by only £8 per head of population – when in Middlesbrough the figure was £107.

Mr Mallon said: “This Government has declared financial war on this town and the North-East as a whole, while many of its policies are rewarding the richer areas.

“This will result in a widening of the North-South divide.

“It’s clear to me that this Government has no idea what a fragile economy and social deprivation look like.”

North Yorkshire County Council said its settlement left the authority with a shortfall in excess of £30m over the next 15 months.

Clare Williams, the union Unison’s North-East regional convenor, said the settlement heralded the start of the biggest shake up of local government since 1945.

She said: “This will have huge implications for our communities and the fabric of our society in terms of delivery of public services.

“These cuts continue the Government’s attack on women, particularly those working in the public sector, many of whom are low paid.”

The Association of North- East Councils said the region had been particularly badly hit by the cuts, with ten local authorities out of 12 receiving much higher than the national average budget reductions.