NORTH-EAST countryside dwellers enjoy a quality of life that is among the best in Britain, according to a new report published today.

It also says the region offers some of the most picturesque scenery to be found in the UK - a far cry from the traditional blinkered view of polluted countryside, landscapes peppered with coal mines and rows of dilapidated terraced homes.

But the report, commissioned by The Countryside Agency, warns rural parts of the region still face big challenges.

Key findings include:

l On average people in rural areas are slightly healthier than those in urban areas, but North East rural areas still lag behind England as a whole.

l Rural areas exhibit a shortage of affordable housing, and homelessness is rising. In the Tyne Valley, Teesdale and Tees Valley, relatively affluent households live alongside the severely disadvantaged.

l The average North-East rural house cost £74,836 in March 2000, compared with the English average of £99,955, but was significantly higher than the North-East non-rural average, £53,534.

l Forty four per cent of North-East rural parishes were without a permanent village shop, 41 per cent had no post office, 33 per cent no pub, more than 80 per cent no local GP and 82 per cent no public nursery facilities.

l North-East rural tourism was estimated to be worth £266m in 1998.

l An estimated 25 per cent of farmers are considering diversifying into non-farming income sources.

l Local authority spending on public transport in the region's rural districts averaged £3.20 per person in 1997/98, compared with £7.60 in England as a whole. In 1997, 42 per cent of rural parishes in County Durham were without a bus service, as were 66 per cent in Northumberland, and 16 per cent in Tees Valley.

The report brings together the latest data on all aspects of rural life, giving the most comprehensive overview so far of the region's rural health, and will underpin the agency's future work.

The agency's regional director, Keith Buchanan, said: "For many, the countryside offers a quality of life many townsfolk would envy. But there is no hiding the fact there are many inequalities, and serious work needs to be done to bring opportunity and prosperity to all.

"We now have a benchmark against which to measure the success of a whole spectrum of initiatives, ranging from those promoting tourism and economic diversification, to those encouraging rural housing, rejuvenating market towns and introducing rural transport partnerships.

"The information will be valuable to the Countryside Agency and also to our many partners, many of whom contributed valuable data."

The Government recently published its Rural White Paper, setting out its blueprint for the future. The Countryside Agency will use the State of the Countryside report as a key tool in ensuring that the Government delivers on the promises it has made.

Philip Lowe, of the Countryside Agency for the North-East, said: "With the economic decline of agriculture and other primary industries, we need new economic activities to sustain this living countryside."

l Copies of The State of the Countryside 2000: The North East are available from Countryside Agency Publications, PO Box 125, Wetherby, LS23 7EP, price £8.