How the billions have changed Merseyside's pauper image.

OBJECTIVE 1 has been a major factor in the regeneration of Merseyside over the last 10 years.

It is funded directly by the European Commission, which allocates money to deprived areas all over Europe, judging each area's eligibility on its Gross Domestic Product per head of population.

For an area to receive grants, its GDP must be less than 75% of the European Union average. Liverpool was first granted funding in 1994, when its GDP per person was around 68%.

Talks about the prospect of Objective 1 status for Merseyside started in 1993 with Merseyside's political masters already drawing up their own dream lists in expectation of the Brussels windfall.

Perhaps the most ambitious plan was a new high-level road bridge linking Liverpool and Wirral - a scheme first thought of in 1961. New roads and docks would be built to turn Merseyside into a gateway to Europe and the world.

The Government Office for the North West, with its Liverpoolbased Objective 1 office, successfully led the bid to the European Commission, called the Single Programming Document, explaining how the Euro-pot would be used.

The plans focused principally on four areas: developing business, giving more opportunities to people, developing business locations and investing in pathway communities.

In the business world, the aim was to help the area's businesses become more competitive by investing in those with the greatest potential to grow.

Securing the award proved to be anything but plain sailing, with local squabbles threatening to undermine the region's hopes.

But in 1994 the package was finally in place, with one leading EU official describing the funding as ``the last chance'' saloon for Merseyside.

The funding was a welcome relief in an area that had seen 76, 000 manufacturing jobs disappear in the previous decade. Liverpool, once known as the British Empire's major seaport, was now part of an area officially described as one of Europe's pauper regions.

Objective 1 gave Merseyside's five boroughs a package worth pounds 600m, growing to pounds 1. 5bn once private sector and UK government contributions were added.

By 2000, when the region won its second phase of Objective 1 funding, Merseyside's GDP had reached 71% of the European average, and was still designated as a ``pauper'' region with a huge amount of ground to make up.

The second tranche is providing an even bigger package, worth pounds 890m, climbing to pounds 2bn with match funding from the private sector and UK government.

The programme aimed to help 4, 800 businesses by the end of 2006, and saw John Lennon Airport granted pounds 23m and, along with investment from budget airline Easy Jet, increase its annual capacity to 4. 5m passengers.

By the time the second phase of Objective 1 is closed down in 2008, officials expect to have helped 13, 800 new businesses get off the ground, smashed the target for creating 34, 000 jobs and safeguarded 14, 600 existing jobs.

The biggest project to secure funding during 2004 was the Kings Dock arena development, which secured a grant of pounds 50m.