UP to 160,000 homes could be built across the North-East over the next two decades in an ambitious attempt to reverse the region's population drain.

The proposals to halt the decline in the region's population and bridge the North- South divide are among key proposals outlined in a draft Regional Spatial Strategy unveiled yesterday.

The consultation document, called View: Shaping The North-East, will form the basis for the future of the region's transport, housing and industrial development to 2021, with people having a chance to comment on what the authors say would deliver a regional economic renaissance.

Drawing up the strategy was to have been one of the functions of the directly-elected regional assembly, overwhelmingly rejected by the electorate in the referendum earlier this month.

Instead, it has been drawn up by the North-East Assembly, the unelected body made up of local council representatives, MPs, the trade unions and the voluntary sector.

After a period of public consultation, the final say on the strategy will be made by Deputy Prime Minister John Prescott, or his successor after the next election.

Hours after his defeat in the referendum, Mr Prescott said the Government's policy in the region would be implemented through the existing Assembly, the Government Office North-East and regional development agency One NorthEast, which would work alongside the Northern Way strategy, which he announced earlier in the summer.

Yesterday's draft strategy sets targets to deliver 2.8 per cent economic growth every year until 2021 - up from 1.8 per cent in 2001 - which the assembly described as "aspirational but deliverable".

Growth is expected to centre on key development sites in the region, based around the twin centres of the Tees Valley and the Tyne and Wear conurbation.

It also aims to bring to a halt decades of decline in the region's population, which fell by 3.8 per cent between 1981 and 2001. The strategy predicts a population increase of 1,900 people a year over the next 20 years, generated by improved regional prosperity.

The document allows for the building of more than 160,000 homes which, when the demolition of ageing housing stock around the North-East is taken into account, means a net increase of about 110,000 homes - almost all on brownfield sites.

Bob Gibson, chairman of the North-East Assembly, said the strategy was "very much an outline of our thinking so far and is a working document. Its recommendations are not set in stone."

He added: "There is a very real opportunity for people to make their voice heard on the issues and concerns which most affect them, their communities and the North-East."

Public consultation on the proposals will run until February, with events taking place around the region. The final document is expected to be ratified by the Government by the end of 2006.