Cabinet members in North Tyneside, headed by mayor Chris Morgan, agreed the £5.4m cutbacks at a meeting at Wallsend Town Hall.

Mr Morgan said a further £2.5m cuts would be needed because of an overspend inherited from the previous Labour administration.

The budgeting means the scrapping of the Windows on the World (WoW) free music festival, one of the largest in Europe.

'Difficult decisions'

Mr Morgan said: "I was elected with a mandate to sort out the finances at North Tyneside.

"It is a question of prioritising and we have been forced to make difficult decisions.

"The £5m of savings will free up enough cash to put more into front-line social services.

Mr Morgan says he inherited financial chaos

"Making savings of this size is not easy but I have had to make the decisions."

As well as trying to save the music festival protesters wanted to prevent the stopping of grants to welfare rights centres, which provide financial, health and employment advice.

One of those who uses the centres said: "They help so many people with getting a job, claiming benefits, and providing good cheap meals."

'Services continue'

Those opposed to the cuts are also angry at the closure of the Linskill Centre in North Shields, which is used as a base for disabled children and young people.

But Mr Morgan said: "We are only closing the building, the services will continue to be provided from other council buildings.

"The building is very expensive to maintain and to heat."

The WoW music festival, which cost £330,000 to stage, started as the North Shields Fish Quay Festival in 1987.