Concern is mounting that Eric Pickles is looking to derail plans to hand the North East the same multi-billion pound spending powers as Manchester.
The Communities Secretary is thought to be behind a sudden Whitehall wariness towards plans for a new combined authority, bringing together seven North East councils in order to have control over Government cash.
The plan is a Government policy which has been fiercely supported by cities minister Greg Clark. But the start of a Government consultation on the behind-the-scenes merger has seen Mr Pickles raise the legacy of the failed North East Assembly bid.
Any prospect of handing the North East the same powers set to be offered to the UK’s biggest cities will only get the go-ahead if there is overwhelming support shown during the consultation, as ministers try to ensure it does not force through an unpopular version of the assembly.
But council leaders say the real reason for the move is Mr Pickles’ long standing opposition to allowing a Labour-dominated North East voice.
They are now urging businesses and other groups to back the moves, or see the region miss out on control of extra transport and skills cash, ahead of a visit to the region next month by Mr Clark.
Last night Newcastle Council leader Nick Forbes said it seemed “odd” that after three years of being told to combine councils, Mr Pickles was now making that task more difficult.
He added: “For the past two years the Government have given strong encouragement for North East councils to develop a combined authority to accelerate job creation and act as a skeleton for the devolution of functions from Whitehall.
“Introducing a new hurdle just as we’d come to an agreement about the way forward looks like once again the North East is a victim of central government wrangling.”
Durham Council leader Simon Henig said: “It is very important that our councils continue to work together for the benefit of the whole area and that I urge residents and businesses to support the proposals by taking part in the consultation.”
In the Government’s formal consultation document concerns are raised over the ‘North East Assembly factor,’ warning that the councils must show local support after the disastrous devolution referendum in 2004.
Back then some 78% of those voting said they did not want the Assembly, rejecting it as “an additional tier of Government.”
The document adds: “Given this clear expression of widespread opposition among local residents for new governance institutions, the Government will give particular weight to evidence from the consultation about the level of local support this proposal for a combined authority commands.”
The North East Chamber of Commerce is among the many backing the proposed combined authority.
Head of Member Relations, Jonathan Walker, said: “The proposals for a combined authority demonstrate a collective will from organisations across the whole area to unite for the good of the region and stimulate economic growth.
“To ensure a thorough and reasoned debate on this, the Chamber would encourage all businesses to take part in the consultation on the combined authority and send a clear demonstration that we are a united, joined-up region with clear shared goals on improving our economic health.”