Newcastle Central MP Chi Onwurah said the announced closure of the Northern Rock Foundation is an 'incredibly sad day' for the North East.
The charity will close at the end of the year after Virgin Money, its only source of income, halted funding.
The Northern Rock Foundation has made such a difference to so many lives as well as supporting the culture and values of the area.
I have often personally seen the positive consequences of Northern Rock donations.
I am very disappointed that Virgin Money could not find a way of working with such an important local institution given the personal commitment to the city and the region that Richard Branson and the company emphasised as part of their bid for the bank and in subsequent exchanges.
Virgin Money says it has have been 'very proud' to support the Northern Rock Foundation in the North East and Cumbria.
Today the charity announced it will close at the end of the year after it failed to reach agreement with Virgin Money on future funding.
The Northern Rock Foundation has contributed to some fantastic work here in the North East and Cumbrian regions for many years and we have been proud to support them with £1.5m of donations over the last two years.
We have tried hard to find a way to continue working together on programmes that would deliver significant benefit to the region, however we have not been able to agree a way forward.
We will continue to support the North East community strongly in a variety of ways and look forward to establishing new partnerships to deliver a range of exciting new projects.
– Jo Barnett, Head of Social Enterprise at Virgin Money
The transfer of liabilities of the Newcastle-based Northern Rock and Bradford & Bingley to the national balance sheet is one of three measures which has had a "significant impact" on the public finances, George Osborne told Parliament in his Autumn Statement - adding £17bn to the national debt.
A report by the financial watchdog the National Audit Office says the Government bail out of Northern Rock could cost the taxpayer £2bn.
The Government spent £1.4bn on taking the troubled bank into public hands in February 2008. At the end of last year it sold part of the bank to Sir Richard Branson's group Virgin Money for £747m.
But the National Audit Office says that deal could cost the British taxpayer £480m and the total cost could get as high as £2bn in the long term. Robin Ashby of the Northern Rock Small Shareholders Group says the Government sold it off too soon.
But North East financial analyst Gary Fawcett of Brewin Dolphin said the Government had no choice.