The council gave the NWRA �80,000 each year

The authority said it feared that council tax was being misspent by the NWRA.

It also accused the body of "crossing the dividing line between 'informing' the public and 'campaigning' for a political objective".

But the NWRA, which received �80,000 a year from the council, has hit back, saying the authority was "a small administrative group intent on self-preservation".

Lancashire County Council said the NWRA had exaggerated support for a regional assembly among people in the North West.

A spokesman said a statement from the NWRA in December 2002 which claimed 69% of the population supported the move was not sufficiently thorough.

He added that another report purported to show 23% of people were in favour of the move, but neglected to mention that 57% opposed it.

It does not represent a withdrawal by Lancashire people but by a small administrative group intent on self preservation Councillor Azhar Ali, NWRA chairman

Lancashire County Council Leader Hazel Harding said: "This gives us absolutely no pleasure because we have supported the concept of an elected regional assembly from the start.

"Although we have not supported the NWRA's stance we have refrained from campaigning ourselves and cannot support an organisation that does run such a campaign.

"We have no alternative. To continue our funding would leave us in a vulnerable position and the legal position is clear - it is an incorrect use of public money to run a campaign on what amounts to a political issue."

But Councillor Azhar Ali, NWRA chairman, said he was confident it had not broken government rules that it should not actively campaign for a regional assembly.

He added: "Despite the County Council's decision, the people of Lancashire will still continue to be represented by their district councils and other members of the regional assembly.