MORE than £4m of funding will breathe new life into the former Vaux Brewery site, unlocking the potential to create up to 4,000 jobs.

Sunderland city centre was dealt a bitter blow when the brewing giant closed in 1999 with the loss of 440 jobs, and wrecking crews moved in two years later to demolish the 105-year-old buildings.

Now the European Regional Development Fund is investing £2.25m to support the first phase of a commercial and residential redevelopment project – a figure matched by the council.

The area is one of the North East’s most significant brownfield regeneration sites with scope to develop up to 66,000 square metres of commercial floorspace, as well as riverside residential units.

The announcement has been welcomed by business and council leaders, as well as Communities Minister Baroness Hanham.

She said: “European Regional Development Fund investment is supporting the redevelopment of this brownfield site, creating a distinctive identity for Sunderland and integrating the site with the rest of the city centre.

“This will accelerate commercial opportunities and remove barriers to investment.

“Creating a new and inspiring business location coupled with a high-quality urban quarter will reinvigorate Sunderland city centre, generating crucial private sector investment and consequent local growth, with the potential for 4,000 jobs on site.”

The investment will improve access for pedestrians and motorists, create a new public square and provide pedestrian links to the rest of the city – a move deemed crucial to the success of the business district by improving the connection between Vaux, the city centre and the rest of Sunderland. The joint investment between ERDF and Sunderland City Council is predicted to generate private sector investment of around £200m and create approximately 4,000 jobs.

Andrew Hebden, assistant director of CBI North East, said: “This is wonderful news for Sunderland and the North East economy in general.

“The Vaux site is one of the landmark regeneration locations in the region and the news that funding has been secured to enable the first phase of this work to get under way is fantastic.

“As well as the obvious boost in terms of the jobs created, this scheme can provide a real shot in the arm for business confidence and is sure to generate additional private sector investment.”

Sunderland City Council leader Paul Watson added: “It’s excellent news for Sunderland that ERDF is supporting such a significant regeneration project for our city.

“To be prosperous our city centre needs more people living and working in it and a productive central business district on Vaux, alongside improved retail offer, new public space and better pedestrian access, will help us to achieve our goals.

“We have a magnificent vision for our city centre, which is gradually coming to fruition.”

The European Regional Development Fund Competitiveness Programme 2007-13 is bringing over £300m into North East England to support innovation, enterprise and business support.