Hundreds of new jobs could be created in a hard hit part of the North-East after business specialists and council chiefs forged a partnership for prosperity.

Officials believe they can help create 1,000 new jobs with the signing of a partnership deal between Redcar and Cleveland Council and Liberata, one of the UK's leading business specialists.

The council says the deal will mean greater job security for 800 council workers who will transfer to the payroll of the new company as part of an agreement worth more than £230m over the next decade.

Neighbouring Middlesbrough Council set the precedent of signing up a private sector company to run some of its services in June 2001, with an agreement with Hyder Business Services.

Redcar and Cleveland Council leader Coun David Walsh says: "We have done something quite remarkable in local authority history - managed to cement a human resource package which goes way beyond our workers' legal rights and will give them increased protection for the next ten years: something I could never promise.

"We've got a deal which gives us a degree of savings and the ability to bring in a whole new ICT network which the council has needed for a long time, with the setting up of a customer relationship structure providing answers the first time round.''

The 800 council staff who will transfer to Liberata's payroll will range from office cleaners to architects with at least 1,000 further jobs created and aspirations for another 1,000 "within the life of the contract.''