EAST Lancashire has been handed a £103million lifeline to rejuvenate its run-down neighbourhoods and rotting housing.

Although the team behind the bid had asked for more the announcement marks the biggest single investment in the region's housing since World War Two and paves the way for an unprecedented regeneration project.

Deputy Prime Minister John Prescott was in Blackburn in person today to announce grants of £68million to East Lancashire's Elevate company along with a further £35million from other agencies.

Blackburn with Darwen was the biggest winner and picked up £22million from the £68million award. Burnley received £15million, Pendle £13million, Hyndburn £11million and Rossendale £2.3million.

It is understood that by 2006 the Elevate programme will have improved 1,200 homes, built 135 new homes, cleared 800 empty properties.

Almost £5million has already been released to the five councils and each area will take a share of the second £35million grant. In Blackburn's case this is believed to be £9million taking the borough's total allocation to £31million.

Elevate was set up in 2003, a year after five East Lancashire councils were told they were to be part of the government's Pathfinder housing project.

The award falls short of a £170million three-year bid that was sent to Whitehall last year, but the company's directors are keen to stress today's announcement covers only the first two years of the plan.

The original £170million bid included £43million for Blackburn with Darwen, £23.5m for Hyndburn, £27million for Pendle and £27million for Burnley, with extra cash for Rossendale and Darwen and other areas.

Political figures are still to comment on the award, which some may fear will not be enough to turn East Lancashire around.

But Max Steinberg, chief executive of Elevate, stressed this cash was for only two years and that he was confident his plan could be delivered. He said: "There are no quick fixes for the challenges we face in East Lancashire, but as this money is invested in the area, people will start to see real differences in the next year.

"The award we received covers the two years remaining in the current government spending plans.

"I am confident over the government's commitment to the 15 year life span of this project and that this commitment will be reflected in the next spending review.

"This will allow us to start work in all five areas across East Lancashire. "

The Pathfinder areas were charged with developing strategic schemes to breathe new life into areas blighted by decaying housing, low demand for property and a collapse of house prices.

The problems were particularly bad in Burnley, a town which has close to 4,000 empty properties and where houses regularly sell for less than £5,000.

As well as housing Elevate East Lancashire has had to draw up plans to ensure the area's problems are addressed permanently and not just displaced or deferred.

Work to clear sub-standard housing has already started in Burnley Wood and in parts of Blackburn as well as areas of Rossendale.

Manchester, Merseyside, Newcastle and Gateshead, Stoke, South Yorkshire, Humberside, Oldham and Rochdale and Birmingham were included in the project.

Manchester and Salford were given £125million, Merseyside £86million, Newcastle and Gateshead £69million. Oldham and Rochdale were today given £53.5million.

Unlike Manchester and Merseyside East Lancashire must now wait until a government spending review next year to see if it will eventually get all the money it wanted to deliver the programme.

Government sources said there was a commitment to devote more cash during the spending review and keep the Pathfinder project alive for between 10 and 15 years, although the latter part is dependent on Labour's success at the next General Election.

Councillor Sir Bill Taylor, leader of Blackburn with Darwen Council said: "This has been a challenge, we have faced competition from other parts of the UK, all eager for a greater share of the funds available, so I am delighted that we are able to secure the necessary funds to make a real difference to peoples lives."