Seven local authorities came together earlier this week to request stricter measures across the region in response to rapidly rising infection rates.
In their request to the Department of Health and Social Care, the leaders of Northumberland, Newcastle, North Tyneside, South Tyneside, Gateshead, Sunderland and County Durham asked that people be able to enter other households for the purposes of childcare while the main carer was at work.
Health Secretary Matt Hancock approved a host of new regulations but rejected this request from the North East.
Leader of Sunderland City Council, Councillor Graeme Miller said: "This was a very straight-forward request for the Government and the Secretary of State.
"It is only fair to say that, on behalf of thousands of working parents, the decision that came back was a major disappointment. Childcare can be very expensive and many parents in our region have grandparents or other family members and friends who regularly give their time to help and support.
"I fear many parents might now have to make a wholly unnecessary choice of choosing childcare over their jobs and even their businesses if they are employers.
"This could place many parents with further problems and unneeded economic hardship. We must, and we are, urging Mr Hancock to think again on this.
"There are impacts here on parents, children, schools, employers and businesses that could have been avoided with a better and proper decision. The message is: Please think again and do the right thing."
The new restrictions introduced to tackle rising infection rates came into effect on Friday 18 September. They include a ban on social mixing with other households and new regulations for the hospitality trade among a number of changes.