Another �45m is needed to help the North East close the north-south divide, according to the Trades Union Council (TUC).

The TUC claims regional development agency One North East (ONE) needs the money to bring jobs to the area, and pay for extra skills training.

The call for extra funding comes in a TUC report, Half the World Away, which reveals three of the country's worst unemployment areas are in the region - Middlesbrough, South Tyneside, and Newcastle.

Kevin Rowan, of the Northern region TUC, said: "The North East faces a huge basic skills challenge, and we need to do much more to address that.

'Skills problem'

"We want intelligent intervention in the labour market, and we are calling for more funding to ensure that.

"We have a huge problem in general skills levels, and we are not investing enough in those areas."

The TUC says the region has the poorest literacy and numeracy in the UK and the lowest rate of post-16s staying on in education.

Mr Rowan added: "We are not investing enough in research and development.

"Levels are completely insignificant compared to what they need to be to generate the economy.

"With the worst basic skills problem in the country, ONE will need extra funding to face the future with confidence."

The call follows a report earlier in the month which showed business start ups in the region were running at a quarter of the rate for those in the South West and a tenth of the London level.

Chairman of One North East, Dr John Bridge, said extra funding would be welcome but also asked for regional development agencies to have more responsibility for Learning and Skills Councils.