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.
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 chairman of the Northern Rock Foundation said they are very disappointed that talks with Virgin Money have broken down, leading to the closure of the charity.
The Foundation, which was originally the charitable wing of failed bank Northern Rock, doesn't receive funding from any other source.
The charitable arm of failed bank Northern Rock will close after Virgin Money confirmed it could not continue to fund it.
The Foundation said its closure was now inevitable as Virgin was its only funding source.
The Foundation's current grant programmes were due to close at the end of this year.
Announcements on the use of remaining funds will be made in the future.
It is five years to the day that the bank Northern Rock was nationalised after getting into financial difficulties.
Since then, part of it has been sold off to Richard Branson.
However, even after all these years small shareholders are still fighting for compensation and claim that they were robbed by the Government.
Watch the full report from Derek Proud below.
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.
For further updates see the national ITV News.
The cost of saving Northern Rock could cost the tax payer £2billion, according to a report from the Commons Public Accounts Committee.
The Newcastle-based bank got into difficulties in 2007 when it became the first bank in 150 years to suffer a run during the then financial crisis.
Margaret Hodge, the committee's chair, has said the then Labour government took too long before deciding to nationalise the bank in February 2008.
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.