RAILWAYS in the North-East will be starved of investment unless there is a change in government policy, passenger watchdogs have warned.

The warning comes amid increasing fears that cash is being directed towards high-profile projects in London and the South-East.

Routes between smaller towns and cities which are less profitable could also face cuts in investment.

The North-East Rail Passengers' Committee has now called for a switch to more localised funding through regional government.

Spokeswoman Fran Critchley said: "The only way of the railways improving is if the money is there from the Government and the local franchises receive cash injections.

"If there was more power in the region to decide what we want to do with our own funding, rather than Westminster dictating to us, we could control things better."

The Government's ten-year transport strategy has plans to expand the passenger network by 50 per cent, but critics say this will depend on the level of funding available to different areas.

Brian Millns, chairman of the Tees Valley branch of lobby group Transport 2000, said: "We are in desperate need of several new stations in this area with new staff and proper facilities."

Mr Millns cited the frustration felt by passengers on the Darlington to Middlesbrough line.

A long-awaited £1m upgrade of Thornaby railway station, which is at the hub of the local network, has been put on hold after the costs of the project went up.

The partners in the project, which includes train operator Arriva Trains Northern, are seeking additional funding so work can begin.

The Association of North-East Councils has also expressed disquiet about the uncertainty over the future of the East Coast Main Line.

Kay Wilson, of the association, who is also spokeswoman for the North-East regional assembly, said that next year's Queen's Speech was expected to reveal more details to devolve power to the regions. But it was not known how much budgetary responsibility would be available for areas such as transport.

She said: "We certainly think we could do a better job if we had a devoted pot of money for things like the roads and the railways.