Boris Johnson’s Tory government was accused of bending the rules to suit the South after wrangling with Manchester over £5 million before offering up billions as soon as London faced tougher pandemic restrictions.
Mayor of Greater Manchester Andy Burnham had been locked in a furious row with Number 10 this week over moving the region from its current status, equivalent to Tier 2 and into tougher restrictions in Tier 3.
Talks broke down after Mr Burnham and other council leaders demanded £65 million but the Government would not budge from £60 million, he said.
But on Thursday, Chancellor Rishi Sunak announced billions in extra funding for businesses under Tier 2 controls following the announcement that London was to be moved into that category.
And firms facing a hit by Tier 2 restrictions, such as those in the North, will be able to backdate claims to August for help.
Mr Burnham said he was “open-mouthed” and questioned why this was not “on the table” during his talks with the Prime Minister.
Mr Burnham, speaking on BBC Radio Manchester, said: “We just heard in the news, we are getting all this money now for Tier 2, well we’ve been in it for three months, as Sir Richard Leese (Leader of Manchester City Council) said, it’s only now London come into it they are giving the money.
“I nearly fell off my chair in the office just as I got that news before I came here.
“Because I was in those negotiations on Tuesday and the big case I made to the Prime Minister was, ‘You can’t just treat us the same as the Liverpool City Region or Lancashire’.
“We’ve been in these restrictions for three months so our businesses are closer to the edge now than they are in other places and that has to be taken into account in the funding package you give to us for Tier 3.
“But they’ve now just put on the table today the extra funding, it would seem, that would have made a much different outcome possible on Tuesday.
“I just … why have they done that? They’ve accused me of politics. If they had just done what they were promising to do we wouldn’t have even got into that position on Tuesday.”
The package, announced by the Chancellor, includes making the Job Support Scheme, which replaces the current furlough system, more generous.
There will also be grants of £2,100 available for firms in Tier 2 areas of England, primarily aimed at helping hospitality and leisure venues which have seen takings plummet due to restrictions on households mixing.
In a move which could be worth more than £1 billion, these grants will also be available retrospectively for areas which have already been subject to restrictions, and come on top of higher levels of additional business support for areas moving into Tier 3.
The move to make the payments retrospective is aimed at heading off criticism from areas of northern England which have been under restrictions for months.
Mr Burnham said: “It feels as though its dividing and ruling.
“Why do we see London’s issues, much more than we see Liverpool’s issues, Greater Manchester’s issues?”
Boris Johnson, speaking at the Great Northern Conference, said: “I have to be honest with you, this winter is not going to be easy but I am certain that the people of northern England will confront this crisis with the fortitude and selflessness we have seen throughout.”