THE Prime Minister put knowledge at the centre of the country's economic future in a speech to business leaders today.

Tony Blair was addressing the North East Economic Forum, where he told them it was time for optimism'' for the region's prospects.

Speaking at Hardwick Hall in his Sedgefield constituency in County Durham, he said the North-East had already gone through great economic changes as the traditional industries of steel, ship building and coal declined.

The key to economic success today is the abilities of countries to adapt to change,'' he said.

The pace of change around the world is enormous.

We have been through, over the past 30 years, one of the biggest industrial restructurings that any part of Europe has known.'' We have shown we can do it, we can change the way we work and adapt to the enormously rapidly changing economy around us.'' The traditional industries have been replaced by hi-tech businesses, he said, and this will continue to develop with better partnerships with universities.

I think for this region, and indeed for our country, yes, we have hard-won economic stability which has given us relatively-low interest rates, inflation and unemployment.

However, the next big stage to make our economy competitive for the future, and that is all about knowledge.'' Mr Blair then left the forum to carry out an engagement on Tyneside.