FORMER Cabinet Minister Peter Mandelson's campaign to tackle the North-South divide has had a £35,000 boost from a charity.

The Hartlepool MP has been given the money by the Joseph Rowntree Reform Trust to fund a two-year research progamme into tackling the need for economic regeneration and devolution in the region.

It follows figures showing the North-East lagging behind by more than 36 per cent in terms of competitiveness, compared with London.

The MP said his research will inform the devolution debate - including the need for a North-East assembly.

It would be linked, he said, to the Government's forthcoming White Paper on regional government, expected in the New Year.

Since leaving the Government, Mr Mandelson has been outspoken in promoting the need for devolution to the regions. He believes they have been ignored, while ministers pressed ahead with devolution for Scotland and Wales.

The UK Competitiveness Index 2002 this week revealed a growing divide due to a continuing unfairness in regional spending.

The survey urged the Government to reverse the process by redefining the Barnett formula, which causes a £1bn spending gap between Scotland and the North-East.

Mr Mandelson said: ''There is a gap between North and South in entrepreneurial activity, research and development and business start-ups. As a result, employment creation and economic activity in the North is lagging behind regions in the South.

The ex-minister claimed the "new economy agenda" he pioneered as trade and industry secretary has yet to be applied to the regions.