PARTS of the region are leading the way in Government attempts to turn benefit claimants into entrepreneurs – who set up their own businesses.

Around 1,230 people in the North-East and North Yorkshire have taken out ‘Dragon’s Den-style’ loans to help them come off the dole and put a business plan into action.

The best ideas receive loans of around £2,000 - which can be repaid over five years at a low rate of interest – as well as guidance and mentoring support.

Some entrepreneurs have used the loans to pursue existing hobbies, such as landscape gardening, painting and decorating, hairdressing and building services.

Others, across England, have branched out into driving instruction, personal fitness training, accountancy and cafes – even a dog–grooming business and a chocolate company.

In the North-East, the highest number of loans has been arranged in County Durham (250), followed by Sunderland (120), Stockton-on-Tees (110), Middlesbrough (80) and Redcar and Cleveland (80).

In North Yorkshire, Harrogate (90) has the most budding entrepreneurs, ahead of Scarborough (70), York (50) and Hambleton (40).

David Cameron has hailed the scheme as crucial if Britain is to “compete on the global stage”, by tapping into people’s entrepreneurial spirit.

He said, last year: “I am determined to get behind people who have ideas that will work and a can–do attitude that will turn those ideas into successful enterprises.

“It doesn't matter what your background is, or whether you are out of work. If you are prepared to work hard and aspire to achieve more, this Government - through schemes like the enterprise allowance - will back you.”

The scheme was criticised after getting off to a slow start, with some pouring scorn on the target to create 40,000 new businesses by 2015.

Some accountants warned the promised loans are too small to launch a viable business – which meant many are destined to fail.

But the department for work and pensions (DWP) said 15,210 loans had been taken out across England by last November – a doubling of the total within six months.

More mentors have been signed up to provide crucial step-by-step guidance to would-be entrepreneurs and remove delays in getting businesses started.

And people can now get business advice from the moment they become unemployed, rather than having to wait at least six months, the rule when the scheme started.

Its chairman is James Caan, a former Dragon in the BBC show, who said: “It is only with this renewed focus on youth entrepreneurship that we will create more jobs and wealth and see the economy flourish once again.”

The Government is also examining an idea promoted by Sir Richard Branson to give young entrepreneurs cheap loans at the same rate as university students.