A BILLION-POUND deal to sell the North-East's gas distribution network will be sealed this week.

The National Grid has agreed to hand over control of the region's supply to a consortium headed by Chinese businessman Li Ka Shing, for £1.4bn.

Negotiations will be finalised on Wednesday, along with the sale of distribution networks in Scotland, the South, Wales and the West, in a deal that totals £5.8bn.

The North-East supply will be owned by the consortium, which is operating under the name Northern Gas Networks (Holdings) Limited.

The National Grid will keep control of large pipes that feed the smaller network, which has been sold off.

A National Grid spokesman said: "It has been two years since we announced our intention to sell up to four distribution networks. They will be sold for a total of £5.8bn."

He said money from the sale will not be kept in the region.

"We are going to pay £2.3bn off our debt, which will get us down to a debt of about £10bn," he said.

"We are giving £2bn back to shareholders and the rest will go on the balance sheet."