Hundreds of low-cost homes will be built in the North-East on former hospital sites in a deal between two Government departments.

The Department of Health has identified 13 surplus NHS sites in the region which will be transferred to the Office of the Deputy Prime Minister (ODPM) for housing.

The sites are among more than 100 across the country which will be transferred to the ODPM from the NHS to tackle housing shortages and the lack of affordable homes for front-line public sector workers, such as teachers and nurses.

More than 15,000 homes will be built nationally, about a third of which will be low-cost.

Money from the sale of the sites to private developers and housing associations will be pumped back into the health service.

In the North-East, the following sites will be transferred:

* County Durham - Homelands Hospital, Crook; Maiden Law Hospital; Aycliffe Hospital, Newton Aycliffe; Tindale Crescent, Bishop Auckland; Shotley Bridge Hospital, Consett.

* Teesside - Hartlepool General Hospital;

* North Tyneside - Killingworth Stores, Killingworth

* Northumberland - St George's Hospital, Morpeth; Birney Hill Farm, Ponteland; Prudhoe Hospital; Stannington Children's Hospital, Northumberland; Ashington General Hospital.

* Tyne and Wear - Cherry Knowle Hospital, Ryhope.

A ODPM spokeswoman could not confirm last night how many houses would be built on the North-East sites.

She said: "The sites will be developed by the private sector and at the moment it has not been decided how many will be built or how many will be affordable housing.

"In areas of high housing demand we are extremely keen to ensure that front line key public sector workers are helped onto the home ownership ladder."

Health Secretary John Reid said that the transfer of the sites across the country would give the health service a £400 million injection and would benefit health workers.

He said: "Staff are the public sector's greatest asset and it is vital that we work across Government departments to provide them with the opportunity to live and work where they choose."

Deputy prime minister John Prescott said: "This deal will unlock major brownfield sites, secure more than 15,000 new homes, and kick-start regeneration as part of a comprehensive programme to create thriving and sustainable communities across all regions of England."