THE North-East stands to benefit from a £500m cash boost unveiled by the Government yesterday to help regenerate rundown property blackspot areas.

The Sustainable Communities Plan, which targets areas including those where rows of terraced houses have been left derelict, has been welcomed by the region's business and community leaders.

It is seen as an opportunity to tackle social and economic problems, while building better communities.

Baroness Blackstone launched the regional plan at an event in Newcastle yesterday, which included a live link-up to the House of Commons for a statement by Deputy Prime Minister, John Prescott.

He announced a £22bn plan for thriving and sustainable communities across the country.

Baroness Blackstone said the plan would include setting up the North-East Housing Board, with responsibility for deciding how the available resources for housing capital investment could best be used to meet the region's needs.

The Newcastle/Gateshead Pathfinder project will get a share of the £500m, which has been allocated for use over the next three years for investment in the Housing Market Renewal Pathfinders.

The baroness said: "A key issue is the need to restructure the housing market in the North-East to meet the needs and aspirations of the population. The region currently has too much old and social rented housing.

"Despite problems of market failure, the region also needs to address issues of affordability of housing in some areas, particularly in the commuter belts surrounding the Tyneside and Teesside conurbations and in some rural areas."

She said: "We need to improve the condition of the region's housing stock.

"Almost 55 per cent of the local authority housing stock in the North-East falls below the decent homes standard."

Baroness Blackstone highlighted the need to tackle deprivation, saying that 36 per cent of the region's population lived in wards ranked in the top ten per cent most deprived in England.

Yesterday's news was welcomed by North East Assembly chairman Tony Flynn.

However, he said: "We hope that resources are not going to be sucked into the South-East. We need significant new investment in the longer term for this region."