Organisers hope the event will bring in millions of pounds to the local economy - and boost Newcastle and Gateshead's bid to become European Capital of Culture in 2008.

The race will visit the Tyne in 2005 as part of a proposed international river festival in the region which will run from 2003 to 2008.

It was last in Tyneside in 1993, when it brought �38m of income to the region's economy.

We know how much potential there is to attract national and international visitors

Tony Flynn, Newcastle City Council leader

Sir Ian Wrigglesworth, chairman of the Newcastle Gateshead Initiative, said: "There can't be a better way of bringing the river to life than to have up to 100 of the world's most beautiful ships arriving here.

"It demonstrates the confidence there is here in the region to put on major events - and that we are on target to deliver the promises we have made in our bid to become European Capital of Culture in 2008."

The Tyne also staged a leg of the Tall Ships Race in 1986.

About 100 ships will stay for three to four days, bringing with them up to 4,000 young people as crew from 30 countries.

The race is designed to foster international friendship, with the other ports visited being in Southern Ireland, France and Norway.

The ships' crews are from around the world

The bid for the tall ships was led by Newcastle City Council, with backing from Gateshead Council, One NorthEast and the Newcastle Gateshead Initiative .

Tony Flynn, Newcastle City Council leader, said: "Having hosted the Tall Ships Race twice before we know how much potential there is to attract national and international visitors and to boost the economy.

"The two previous events were very successful in raising the profile of the city and the region."

Gateshead Council leader Mick Henry said the ships race would further the case for winning the Capital of Culture bid.