THE North-West could lose almost £600 million in crucial Euro aid, the government was warned today.

A major campaign to ensure that the European Union's Regional Aid Budget is not axed in 1999 is being launched at Westminster.

The Alliance For Regional Aid fears that changes in the way the EU distributes cash grants could spell the end for the current system which provides £1 billion a year to 13 industrial areas of the UK.

Under the Objective Two scheme older industrial areas in Lancashire, Greater Manchester and Cheshire get £584 million a year in grants. The campaign has all party backing from 133 local councils and 32 MPs including Pendle MP Gordon Prentice and Leigh's Lawrence Cunliffe.

A spokesman for the Alliance saids: "This is the biggest ever all-party campaign by local authorities.

"If this funding is lost, it will be devastating to the areas concerned.

"Current EU spend for the British areas between 1994 and 1999 is greater than the combined budgets of the Welsh Development Agency, Scottish Enterprise and the English Partnerships."

The existing Regional Aid scheme is due to be wound up at the end of 1999. And the European Commission has suggested reforms for the Year 2000 and beyond with the idea of concentrating the money on fewer projects in fewer areas.

Cash will allocated on the basis of local unemployment rates which are artificially low because of the way the previous Conservative government altered the way they were compiled, says the campaign.

It fears all 13 areas could end up with nothing at all.

The campaign wants the government to change the way unemployment figures are compiled to give an accurate figure for the jobless in each region.

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