MINISTERS have been told North East firms should be awarded major rail construction contracts to compensate the region for its poor transport links.

Council leaders have expressed concerns following the failure of the Government to include the area in its £32.7bn high-speed rail scheme.

Although the project will connect Birmingham, Leeds and Manchester to the capital, Newcastle is set to miss out with trains travelling to and from Tyneside on lines built during the Victorian era.

Now, North East councillors are urging the Transport Secretary to consider ways in which the region can benefit from the rail development through the award of contracts to local businesses.

A motion set to go before Newcastle City Council next week will commit local authority leaders to lobbying ministers for multi-million pound contracts to come North.

Liberal Democrat councillor Peter Leggott said: “The construction work on the line itself and the manufacture of the equipment used on the line should be spread among companies in all parts of Britain, including Tyneside to offset the weight of investment in the South.”

Transport Minister Justine Greening spoke of the project as a “national scheme in the national interest” and dismissed concerns that the benefits would only be seen in the South.

It is thought Hitachi trains, already bringing train-building work to Durham, could be one of those which will eventually win significant Government contracts.

Top of Newcastle City Council’s agenda is the need for the area to be included in Phase Two plans, which outline the extension of the line, a move supported by the North East Chamber of Commerce .

Mark Stephenson, policy adviser at the chamber said: “There is a clear economic case for the track to extend to Newcastle. What we need is a clear and transparent commitment from the outset to send a positive signal to investors in the region.”

With a current lack of commitment by the Government, the award of contracts to North East businesses is seen as a small but welcome compensation. Mr Stephenson, speaking of the opportunities for businesses in the North East to become part of the high-speed scheme, said: “The chamber is keen to increase economic opportunity in the region by facilitating the relationship between the Government and North East businesses.”

A Department for Transport spokesman said: “The Government believes it is important that UK-based industry should be in a position to benefit from the opportunities presented by the development and delivery of HS2.

“Of course, the normal UK and European regulations will be followed.”