YORK'S hopes of attracting thousands of jobs which are being relocated to the North from London have been dealt a hammer blow.

The Treasury last year ordered a study into the most suitable locations for up to 20,000 Civil Service jobs.

Business leaders, as well City MP Hugh Bayley, have been lobbying for York to be a big winner.

The influential Town and Country Planning Association also urged the Government to target what it called a "necklace" of railway towns and cities, such as Darlington, Durham and York.

Major campaigner to lure government departments to York has been York-england.com, the new regional investment board for York and North Yorkshire. Now it has pledged to fight on regardless.

But the study, carried out by property consultants King Sturge, has excluded York from the top list of suitable sites.

The city is understood not to fit the criteria that relocation should be used as a tool to kick-start faltering local economies.

York and Harrogate, which has also been excluded, already have relatively low unemployment rates.

Instead, King Sturge picked Middlesbrough, Sunderland. Stockton-on-Tees, Newcastle and North Tyneside as locations for public sector staff.

Newcastle is recommended as an alternative for the highly-paid jobs - those in policy-making and science.

Middlesbrough is suitable for "interactive call centres", such as queries to the NHS Direct hotline and Inland Revenue tax helpline.

Sunderland, Stockton-on-Tees and North Tyneside are all recommended for both basic and interactive call centre jobs and for clerical employment.

Chancellor Gordon Brown ordered the review at the end of last year. Sir Michael Lyons, the former academic carrying out the review for the Chancellor, is expected to lean heavily on the King Sturge analysis in making his recommendations.

The study analysed 102 towns and cities, with a population greater than 100,000, outside London and its wider region.

The criteria used included unemployment, earnings, catchment population, office stock and empty government buildings.

A Treasury spokesman said: "The study by King Sturge will be one source that the Lyons Review will draw on, but will not be the only one.

"Sir Michael will be making general recommendations, but it will be up to individual departments to look at which functions and staff can be moved to which locations."

Imelda Havers, chief executive of york-england.com, said: "The issue will ultimately be decided by individual government departments. We are still very active in this area and still confident, regardless."

Updated: 10:28 Tuesday, February 03, 2004