Tony Blair: Problem needs more than money

But the prime minister said some estates are so bad they may have to be demolished.

The 'pathfinder areas' where the first stage of the New Deal for Communities will be tested are:

• Liverpool
• Manchester
• London boroughs of Newham, Hackney, Tower Hamlets and Southwark
• Newcastle upon Tyne
• Middlesbrough
• Nottingham
• Leicester
• Birmingham
• Sandwell
• Kingston upon Hull
• Bradford
• Norwich
• Brighton and Hove
• Bristol

Holly Street architect David Storer: Residents' voices must be heard

Tony Blair launched the scheme at the Holly Street estate in Hackney, east London.

He said it was "a priority for government which affects us all".

But Mr Blair warned it was not just a question of spending money to find solutions.

Tony Blair: Launched scheme on London estate

"Besides the extra finance we need to tackle every single aspect of what goes to make up a decent quality of life.

"Homes, health, crime, vandalism, employment and training opportunities, new community facilities - the whole lot has to be tackled."

Mr Blair has promised to set up a series of regional action teams of ministers, officials and business and community experts to try to improve the situation.

There will be extra money which people around the country can bid for.

Kim Catcheside: "Final rejection of failed 60's housing experiments"

It is intended to develop the scheme into a national strategy and eventually a long-term plan to improve poor neighbourhoods over a period of 10 to 20 years.

In a preface to a report from the government's Social Exclusion Unit, the prime minister writes: "We all know the problems of our poorest neighbourhoods - decaying housing, unemployment, street crime and drugs. People who can, move out.

"Nightmare neighbours move in. Shops, banks and other vital services close.

Hard drugs are rife on many estates

"Over the last two decades the gap between these 'worst estates' and the rest of the country has grown. It has left us with a situation that no civilised country should tolerate."

Mr Blair's speech followed an article in The Express where he accepted that some housing projects are "sinking ships" and beyond redemption.

"Some estates are beyond rescue and will never be places where people want to live," he told the newspaper.

"That could mean moving people to new homes, levelling the site and using the land for something the public wants."

The social exclusion report says the UK still has "pockets of intense deprivation where the problems of unemployment and crime are acute and hopelessly tangled up with poor health, housing and education".

The report says many people are trapped by their surroundings

"They have become no-go zones for some and no-exit zones for others," it says.

It estimates that England alone has about 3,000 such neighbourhoods, not all of them local-authority housing estates or high-rise blocks.

The report blames mistakes by past governments that have tended to concentrate the poor and unemployed together in neighbourhoods where hardly anyone has a job.

Shopkeepers have deserted many estates

Past efforts failed because "a joined-up problem has never been addressed in a joined-up way" the report says.

The Social Exclusion Unit, was set up last year to tackle social problems that in the past have slipped through the cracks between different branches of the government bureaucracy.

The unit's first report tackled truancy and exclusion of troublesome pupils from school, and the second dealt with the homeless.