BLACKBURN with Darwen has lost out in its bid to become a city for the second time in two years -- this time to local rival Preston.

But the leader of the borough's council said missing out on the Queen's Golden Jubilee honour would not affect their quest to regenerate Blackburn town centre.

The borough was one of 26 bids in England looking for the honour as part of the Queen's Golden Jubilee celebrations.

But today the Lord Chancellor Lord Irvine told Westminster that Preston had won the contest to become England's newest city, beating off not just Blackburn with Darwen but North West towns Blackpool, Bolton, Stockport, Warrington and Wirral.

Four other UK Cities were also created today -- Stirling in Scotland, Newport in Wales, and Lisburn and Newry in Northern Ireland. Blackburn with Darwen also lost out in the contest to become the Millennium City to Brighton and Hove, Inverness and Wolverhampton in 2000.

But losing out to near neighbours Preston will be harder to take for council leaders and town residents.

Today, council leader Bill Taylor, who yesterday celebration the authority being named Council of the Year, said: "When we applied for City Status, people said: 'Why Blackburn?'

"I replied 'Why not?' and I stand by that. "Having said I am disappointed it is not us, I am glad it is a neighbouring northern town."

Although no direct financial benefit comes with becoming a city, the prestige is believed to hold weight with big name businesses and shops looking for new areas to open in -- exactly the sort of organisations Blackburn with Darwen had trying to tempt as it regenerates the town centre.

Coun Taylor added: "It will not affect our plans for regenerating the town centre. That will carry on."

Foreign Secretary and Blackburn MP Jack Straw said: "I offer my congratulations to Preston. It's a great honour for the town. I am obviously disappointed for Blackburn. They put forward a very good bid.

"If there is another opportunity to bid for city status in the future, it's obviously something that the council leadership will have to consider."

A spokesman for the Lord Chancellor's department, which took over responsibility for city status contests from the Home Office, said the honour was "sparingly bestowed as a mark of special distinction" with only 17 new grants made in the entire 20th century.

Three main factors were taken into account in the decision - notable features, including regional or national significance; historical features, including royal ones; and a "forward looking attitude."

The actual population size of a town was not a major factor.

Blackburn with Darwen unveiled its bid to become a city last August as they celebrated the 150th anniversary of Blackburn being given a royal charter to become a town.

For their bid, Blackburn with Darwen submitted a glossy brochure which had the backing of all the town's community figures, ranging from the Bishop of Blackburn to Rovers boss Graeme Souness. Business bosses and ethnic minority leaders also pledged their backing.

Council bosses had hoped they fitted the bill for a 'less snazzy, more historical town' as Coun Taylor described it at the time of the bid.

They refused to reveal how much the city bid cost.

Rossendale and Darwen MP Janet Anderson said: "I am very sad that we have lost out yet again but we will keep on trying."