One furious Assembly Member called on Welsh Secretary and Torfaen MP Paul Murphy to justify the decision.

MPs Ian Lucas and Martyn Jones put the champagne on hold

Wrexham was one of six contenders - including St Asaph, Aberystwyth, Machynlleth and Newtown - who competed for the title.

Wrexham MP Ian Lucas said he was angry that conferring city status on Newport compounded the north-south divide in Wales.

Bangor remains the only city in the north.

"Wales now has three civic cities all of which are on the south Wales coast, what kind of message does this send to people in north Wales?" he said.

City contenders

Newport - chosen Aberystwyth Machynlleth Newtown St Asaph Wrexham

"Wrexham's bid was widely recognised as being an excellent one."

Mr Lucas added: "The danger is that people in north Wales will feel excluded and the perception that south Wales has a monopoly of influence within the nation will be perpetuated.

"However, we will continue to do all we can to make Wrexham a better place."

Clwyd South MP Martyn Jones said: "This is extremely disappointing news for the people of the Wrexham area.

"This would have been the ideal opportunity to redress the imbalance. It is an opportunity missed."

North Wales AM Janet Ryder said the failed bid was a "golden opportunity lost" and a "blow for the whole of the north".

Janet Ryder: 'Angered by decision'

Ms Ryder said losing the city bid came on top of the 314 jobs axed at Sharp Electronics at Llay, Wrexham.

"It seems that this decision was the decision of Labour Secretary of State for Wales Paul Murphy...and it is up to him to justify it.

"His actions reveal a lack of appreciation of the bigger picture in Wales."

Mr Murphy, has defended the government's decision to make Newport a city.

He denied ministers were ignoring the north by rejecting Wrexham's bid.

He said Newport had offered the best bid, both through its history and its forward-looking nature.

The final decision was made by Lord Chancellor Lord Irvine on the recommendation of Mr Murphy.

Celtic Manor

Newport has suffered a series of major factory closures and redundancies, including last year's decision by Corus to close part of the giant Llanwern steelworks.

However, Newport has been put on the map by its victory in the battle to stage the 2010 Ryder Cup golf tournament, at the nearby Celtic Manor Resort.

The Queen will visit the city as part of her Golden Jubilee tour of Wales in June.

Mr Murphy will travel to Newport on Thursday to join in the celebrations.