More than 2 million people in Merseyside, Warrington and Teesside will be banned by law from mixing with other households indoors in the latest extension of lockdown restrictions, as Middlesbrough’s mayor took the extraordinary step of saying he was prepared to defy the government. The measures were announced as coronavirus cases continued to rise sharply in the north-west and north-east of England. The new rules mean it will be illegal from Saturday for nearly 5 million people in those regions to meet others they do not live with in all indoor settings, including pubs, bars and restaurants. Similar rules came into force elsewhere in the north-east earlier this week. The health secretary, Matt Hancock, said: “I understand how much of an imposition this is. I want rules like this to stay in place for as short a time as possible, I’m sure we all do. “The study published today shows us hope that together we can crack this, and the more people follow the rules and reduce their social contact, the quicker we can get Liverpool and the north-east back on their feet.” Hancock said a £7m support package would be made available to each of the affected councils. There was an immediate backlash from local leaders, who called the financial help “a drop in the ocean”. Middlesbrough’s mayor took the extraordinary step of saying he rejected the new measures and was prepared to defy the government. Andy Preston, the independent mayor of Middlesbrough council, said his authority and Hartlepool council had asked for a ban on households mixing in their own homes, but that the government’s measures went much further. They were based on “factual inaccuracies and a monstrous and frightening lack of communication, and ignorance”, he said. “As things stand, we defy the government and we do not accept these measures.” He later said he would not condone anyone disobeying the new law, the BBC reported. Mike Hill, the Labour MP for Hartlepool, said he was “totally angered” by the government’s “absolutely disgraceful one-size-fits-all approach”. The restrictions also caution against all but essential travel on public transport and attendance at amateur or professional sports events. Visits to care homes should only take place in exceptional circumstances. Merseyside’s 14 Labour MPs, six council leaders and the mayor of the Liverpool city region, Steve Rotheram, said they welcomed the action being taken, but questioned whether it was enough to contain the virus. They said they were seeking urgent talks with the government to understand the scientific evidence behind the restrictions and to plead for a significant cash injection to prevent economic disaster. Liverpool council estimates that its budget deficit is £45.6m in a best-case scenario because of coronavirus, rising to £66m in a worst-case scenario. Liverpool’s mayor, Joe Anderson, said he recognised that the infection rate was “basically out of control”, but added that hotels, bars and restaurants were in danger of closing. He told BBC Merseyside: “It’s nowhere near enough. £7m wouldn’t be enough for Liverpool alone, let alone across the city region. It’s got to be in the hundreds of millions that we need to support businesses to survive just for a matter of weeks.” Hancock also announced the reopening of Bolton’s hospitality industry, two days after the town’s Conservative council leader told the Guardian that the area had been “forgotten” since its pubs, restaurants and bars were restricted to takeaway-only trade three weeks ago. Jonathan Ashworth, the shadow health secretary, said he supported the new measures, but that areas needed urgent financial support. Otherwise, “existing inequalities, which themselves have a health impact and allow the virus to thrive, will be exacerbated”, he said. “People need clarity as well. Areas like Leicester, Greater Manchester, West Yorkshire, Bradford have had restrictions imposed on them for months now. Millions of people in these local lockdown areas just need some reassurance that an end is in sight.” Hancock was unable to say when restrictions would be lifted in those areas, but said the measures were “vital for suppressing the virus”. Coronavirus cases in Merseyside are averaging more than 200 per 100,000 people, more than four times England average across England. Liverpool and Knowsley have the highest infection rates in England. Measures that restrict social gatherings in pubs, bars and restaurants, such as those introduced in part of north-east England, will have a particularly significant impact on the Merseyside economy, given its reliance on hospitality and tourism. The industries account for half of the business rates that fund public services in Liverpool. Rotheram and six civic leaders said Merseyside’s public finances were at breaking point and needed a “comprehensive package of financial support” from the Treasury.