DAVID Cameron was last night accused of a staggering failure to rebalance the economy after it emerged 32,000 jobs have been lost in North's public sector - while the South actually saw Government jobs increase.

Think tank IPPR North has now called for a new focus on creating jobs as official statistics show a year-on-year rise in the number of people working in the public sector in London and the South East.

That growth comes after unemployment in the North East rose to 11% last month.

The head of the region’s dedicated think tank, Ed Cox, has warned the pace of public sector job cuts is too fast for the northern economy and that the private sector is failing to fill the gaps left behind.

The result, he says, has caused the North’s unemployment rate to accelerate at levels not seen for more than 15 years.

His claims come 19 months after David Cameron said the public sector in the North East was too large, a point he made in a pre-General Election interview.

Since then the Prime Minister has repeatedly promised to introduce measures to grow the number of private sector firms and jobs in the region to compensate for the job losses required as a result of spending cuts.

But IPPR says efforts to rebalance the economy away from a reliance on the South East have clearly failed. In the 12-month period they looked at running up to this summer, Government statistics show there were 32,000 fewer public sector jobs in the North East.

At the same time London saw an increase of 8,000 more public sector jobs, while there were a further 24,000 jobs in the South East, based on figures provided by the Office for National Statistics.