Business Secretary Lord Mandelson said Teesside still had an industrial future
The government has announced a £60m aid package to help Teesside recover from the loss of 1,700 jobs at the Corus steelworks plant in Redcar.
Business Secretary Lord Mandelson said it would offer "direct and immediate" help to the workers who face losing their jobs at Teesside Cast Products.
He said £30m would be invested in low carbon and advanced manufacturing industries to create more jobs.
Union bosses said the money would be better "aimed at saving the plant".
The site's closure will end 150 years of steel production in the area.
The plant's future was placed in jeopardy last year when a consortium pulled out of a long-term deal to buy its steel.
The government should do everything possible to keep a steelmaking infrastructure in Teesside
Derek Simpson Joint leader of Unite
The government said the aid package could create up to 3,000 new jobs in the short to medium term and sustain over 10,000 jobs in the long term.
Lord Mandleson, speaking after a meeting with the area's business and political leaders, said the investment was designed to help the area's transition beyond traditional heavy industry.
He said: "Teesside has the skills, the workforce and the infrastructure to compete in future advanced and low carbon manufacturing.
"We're acting to ensure they have the best support to succeed."
He said £10m would be spent on providing apprenticeships and support for Corus workers who went on to start new businesses after losing their jobs.
He said up to £20m would be invested in the nearby Wilton International site, the other major employer in the area.
Derek Simpson, joint leader of the Unite union, said the scale of the job losses required much more support for Teesside.
He said: "Financial support would be best aimed at saving the Corus works.
"The government should do everything possible to keep a steelmaking infrastructure in Teesside and preserve the valuable skills of the workforce for when the demand for steel increases, which it will inevitably do."
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.