'No easy answer' on the foundation; Minister says decision is 'very tricky'.

Byline: William Green 

EFFORTS have begun to give the Northern Rock Foundation a future amid fears that one of the main sources of funding for North East charities could dry up.

Pressure from North East MPs when the Northern Rock was nationalised in 2008 led Chancellor Alistair Darling to agree that the charity would receive pounds 15m annually for three years.

Maintaining the arrangement was made a condition of any sale of the bank over the three-year period.

And the Government asked the bank's board to identify a viable long-term future for the foundation, which provides grants across the North East and Cumbria.

The charity was established when Northern Rock demutualised in 1997. Up to December 2007, the bank handed 5% of its annual pre-tax profits to the foundation, with the amount topping pounds 190m.

Regional Minister Nick Brown said "thought" had been given to the looming funding issue, but warned there were no easy answers.

He said: "It's very tricky. The foundation is by far and away the most important charitable giver in our region.

"It was before Northern Rock got into difficulties and it remains so, partly be-causthey have some reserves, partly because the Chancellor agreed when the bank was nationalised that for the next three years pounds 15m would be paid in to the foundation each year."

He added: "That three-year period is coming to an end and so the question is how can we secure a future for the foundation and on what terms? "I think the foundation's role is really very valuable, I would like to find a way forward for it. Thought has been given to the problem, but there isn't an obvious solution."

The current arrangements were secured after Mr Brown and Newcastle North MP Doug Henderson made rep-resentationto the Chancellor. Senior North East Tory Lord Bates said: "It would be difficult to argue that the Government should have an open ended responsibility to fund what is a charitable organisation.

"Northern Rock is a vital part of the social community of the North East of England and what is needed is for Northern Rock to be reintroduced onto the stock market, released from Government control and then the two can recommence the arrangement they had before."

There was a now an increasingly "favourable atmosphere" in terms of investors interested in banks, he said.

A Northern Rock spokeswoman said the long-term future of the Foundation had not yet been decided.