But local authorities covering 34 other deprived areas had their proposals rejected by Michael Howard, the Secretary of State for the Environment, and his advisers, who decided that they did not match the competition.
David Blunkett, Labour's local government spokesman, congratulated the winning authorities, but pointed out that the future for the losing areas now looked bleaker than prior to yesterday's announcement at a London press conference.
However, Mr Howard and John Redwood, the local government minister, were at pains to stress that the losing areas were still in line for many other Government grants and could learn from their experience to bid for round three of City Challenge next year.
But Mr Howard side-stepped direct questions about the future timing and scale of the scheme, which officials maintained was entirely natural since any expenditure in round three would not come until April 1994, two annual departmental spending rounds away.
The Department of the Environment won its battle to retain the full budget of more than pounds 1bn for the first two rounds of City Challenge after Michael Portillo, the Chief Secretary to the Treasury, had asked that the spending levels for this year's competition be halved.
Councils in urban programme areas around the country, including several Labour-run councils like Lambeth and Hackney in London, which figure large in Tory demonology, will each receive pounds 37.5m over the next five years.
The scheme, pioneered last year by Michael Heseltine, the former Secretary of State for the Environment, when 11 local authorities were chosen, aims to regenerate urban areas by encouraging partnerships between private enterprise and the public sector. Successful authorities had to demonstrate the involvement of local people and private and voluntary sectors.
Mr Howard said: 'City Challenge marks a revolution in urban policy. The stimulus of competition has transformed the way in which local authorities and their partners have approached the task of urban regeneration.' He added that this year's winning bids demonstrated the benefits of competition which augured well for the areas.
'It will give a tremendous boost to our inner cities and bring new hope to the residents of those areas,' he said. 'This government is determined to do all it can to enable the people who live in deprived parts of our inner cities to share in the opportunities which should be available to all.'
But Mr Blunkett questioned the Secretary of State's sincerity in the light of the 34 losers. 'For the price of commissioning the Trident submarine, announced a week ago, all those bidding for City Challenge funds could have been granted the necessary financial support to transform their inner-city areas and urban blight, which is itself the result of underinvestment and underfunding over the last 13 years.'
Margaret Hodge, chair of the Labour-controlled Association of London Authorities, said that the time had come to rationalise the allocation of funds for inner cities. 'The myriad of confusing schemes, often launched as public relations initiatives by ministers seeking some extra public attention, ought to be more coherent and better co-ordinated.'
The winners are: Barnsley, Birmingham, Blackburn, Bolton, Brent, Derby, Hackney, Hartlepool, Kensington and Chelsea, Kirklees, Lambeth, Leicester, Newham, North Tyneside, Sandwell, Sefton, Stockton, Sunderland, Walsall and Wigan.
(Photographs omitted)Reuse content