The North 'is trapped in vicious spiral of decline'

The debate within Government about the existence of a North-South divide was reopened last night when the report flatly contradicted Tony Blair's claim that clear divisions do not exist.

The debate within Government about the existence of a North-South divide was reopened last night when the report flatly contradicted Tony Blair's claim that clear divisions do not exist.

The study concluded that there were "systematic differences between the fortunes" of the North of England and the South. This comes after Tony Blair provoked an outcry when he claimed that pockets of deprivation in London are as severe as other parts of the country.

But the study for John Prescott, the Deputy Prime Minister, found that "variations within regions" were "dwarfed" by the systematic differences between the fortunes of places in the North and the South.

The State of the Cities report, published yesterday by the Department of the Environment, Transport and the Regions, found that towns close to London and in the South attract investment because of their locations while the North is trapped in a "vicious spiral".

The report states: "Places close to London and in the South have been able to capitalise on growth pressures linked to access to European markets. There has been a process of creating a virtuous spiral in the South and a vicious spiral in the North."

The report, prepared by academics at Manchester, Bristol and Glasgow universities found that the disparities in economic success are reflected in the housing markets of the regions.

The report also found that London was the most successful city in the country while "a disproportionate number of "old industrial" cities were located in the North of England.

"Without making significant changes to their economies and roles, they [old industrial cities] are in many ways unsuited to the current and future needs of the national economy," the academics concluded.