NEARLY half of the parents in a North-East town are failing to claim a Government gift of up to £500 for their children, new figures show.

Middlesbrough has one of the worst records in the country for the take-up of child trust funds, Gordon Brown's flagship measure to give every youngster a financial kick-start.

Only 56.8 per cent of vouchers had been invested by the end of last year. In contrast, in leafy Vale of York, the figure was 80.3 per cent.

A further nine parliamentary constituencies in County Durham and Tees Valley had take-up rates below 70 per cent, according to statistics obtained by the Liberal Democrats.

Julia Goldsworthy, a Lib Dem treasury spokeswoman, said the figures proved the scheme was wasteful - with the poorest the least likely to benefit.

But the Government insisted that was nonsense, because funds are opened automatically, after 12 months, for every youngster whose parents fail to act.

Child trust funds - or baby bonds - were launched in January 2005 to ensure everybody reaching the age of 18 enjoyed a financial asset.

Each child's account - either a cash-based savings account or a stockmarket-linked product - is started with a £250 voucher from the Government.

Further £250 deposits are paid in at age seven and during secondary school.

Children from lower-income households receive £500 at birth and at age seven.

The money cannot be touched until the child reaches 18. Meanwhile, parents, family and friends can top-up the account by up to £1,200 a year.

Ms Goldsworthy said: "This wasteful scheme was designed to help the poorest families, but these figures show that they are the ones gaining the least."

The figure of 56.8 per cent take-up was for the constituency of Middlesbrough. In the next-door Middlesbrough South and East Cleveland seat, it was 67.2 per cent.

There were also low take-ups are Hartlepool (63.3 per cent), Easington (63.7 per cent), Stockton North (64.5 per cent), Redcar (65.4 per cent), Darlington (68.6 per cent), Bishop Auckland (68.7 per cent), Sedgefield (69.5 per cent) and Stockton South (69.6 per cent)