The Treasury is to give little new money for the Northern Way, according to documents obtained by Housing Today.
The news is likely to disappoint many who saw John Prescott's "growth area for the North" as a way to address perceived inequalities in investment between south and north England.

A letter from the chair of the Northern Way steering group, Sir Graham Hall, to chancellor Gordon Brown states it will make "…very few requests for additional resources".

The steering group was asked in February by the deputy prime minister to work up a Northern Way bid for the Treasury spending review.

The letter said: "We are aware that this is an extremely tight spending review … Most of our recommendations feature how to ensure that existing resources deliver better outcomes."

The letter, dated 4 June, does not put a figure on the limited requests it does make. A spokesman for One North East, which is spearheading the creation of the Northern Way strategy, said: "It's not about handing round a begging bowl; it's about identifying priority measures to maximise growth in the North."

However, the letter also suggests the government will need to make "significant" changes to decent homes funding to allow economic growth in the North.