KIDS living in deprived areas of the North-East are being encouraged to stay on at school or college with cash incentives of up to £1,500.

Over the next two years, 2,400 youngsters aged between 16 and 18 will have a chance of securing a slice of a £2.5m Learning Allowance for the Tees Valley.

The cash, which has come from regional development agency One NorthEast and youth service Connexions Tees Valley, is available for youngsters taking a wide range of courses including work-based learning.

Fiona Blacke (CORR), chief executive of Connexions Tees Valley, said: "The project is designed to remove financial barriers which are often reasons given by young people as to why they don't take part in learning and why they drop out.

"Ultimately this will have huge benefits for the Tees Valley."

Funding of £700 is available for one year and £1,470 for two year courses. The cash is given throughout the course at regular intervals, along with a bonus once the course has been completed.

Wards where it is available include Central Darlington, Eastbourne South, Cockerton West, Haughton East and Northgate South in Darlington. Hardwick, Newtown, Victoria, Parkfield and Charltons in Stockton-on-Tees. Grangetown, South Bank, Kirkleatham, Coatham and Newcomen in Redcar and Cleveland.

As well as the cash, students will also receive access to a Connexions advisor who can give careers advice or more in-depth support to overcome particular problems, such as family troubles and drug addiction.

Pam Eccles, executive director of the Learning and Skills Council Tees Valley, who helped develop the scheme, said: "We are tackling a culture where in some areas residents are now into their third generation of unemployment.

"Learning Allowances will improve job opportunities for these young people by giving them the skills they need to compete in the job market."

Learning Allowances are separate to the Education Maintenance Allowance (EMA), being piloted in Middlesbrough and Hartlepool, where youngsters are paid up to £40 a week to stay on at school.

The Learning Allowances will run until the EMAs are introduced across the region in 2004.

Anyone interested in applying for the Learning Allowance project should contact Connexions Direct on 08080013219 for an application form.