THE city regeneration group handed £4m of public funds to change the face of Tyneside is to be scrapped after just three years.

Council bosses have agreed to close down 1NG amid concerns over the firm’s success rate.

Key projects such as a new conference centre for Gateshead have yet to secure funding, with a refurbished Toffee Factory in Newcastle standing as the company’s flagship achievement.

Chief executive Jim McIntyre will step down today, taking with him an £80,000 payment equal to his six months’ notice period.

Lord Falconer, chairman of 1NG, will be asked to lead a new group set up to attract major firms to Tyneside.

The former Lord Chancellor is expected to recruit a handful of leading UK employers to become “brand ambassador” for the city region.

The company’s 14 other staff will either be handed payouts in March in line with council redundancy terms or taken in-house at the two local authorities.

Senior council officers have denied that the decision to close down the company is an admission of failure, claiming the development firm has had to work through the worst recession in living memory and still managed to produce plans for future growth and buy up key sites.

Last night Nick Kemp, the councillor who chaired Newcastle’ regeneration scrutiny panel during the company’s lifetime, said few would mourn its passing.

He told The Journal: “When the company was established we were advised it was set up to address an inability of, or a lack of confidence in, local government here to deliver major investments in the city. While 1NG has delivered a significant economic masterplan, the 1Plan, it is difficult to see what major investment has been generated as a result of its efforts.”