Regional assemblies

Elections by PR 25 to 30 members Headed by a first minister

Each area will be offered a referendum on an elected regional assembly, Mr Prescott said.

Assemblies would offer "new choice, new power and new voices" for England's regions, he added.

They will be able to raise money through council tax and borrowing.

'Centralising'

If the plans go through, "the first assembly could be up and running early in the next parliament," Mr Prescott said.

These proposals for regional assemblies will mean less democracy, more talk, more tax

Theresa May, Shadow local government minister

But the Tories said the move will take power away from local government.

Shadow local government minister Theresa May said: "These proposals for regional assemblies will mean less democracy, more talk, more tax.

"It is a centralising measure and we will oppose it."

She said Mr Prescott's promised review of local government in areas which opt for assemblies would inevitably mean the abolition of county councils.

"I wonder how many people in the North East realise that regional government will mean the end of Durham and Northumberland county councils?", Ms May said.

The Liberal Democrats have warned assemblies would be pointless unless given fully devolved powers.

Extra powers

A spokesman for the British Chambers of Commerce, whose members could sit in the new assemblies said: "The problem will be cost - how will it be funded?".

Prescott: Plan offers local people more choice

While TUC general secretary John Monks said: "Regional government must be about revitalising the English regions and reconnecting regional policies with local communities, rather than adding a new layer of bureaucracy."

The new assemblies will be responsible for economic development and regeneration, planning, transport, housing and culture.

Extra powers would also to be given to existing Regional Development Agencies, regional chambers and Government offices in the regions.

Local councils would retain control of social services, education and other services.

Assembly members would be elected by proportional representation, with each area having between 25 and 30 members, headed by a First Minister.

'Real power'

"The people of the English regions should rightly have the same choice that we gave to the people of Scotland, Wales and London," Mr Prescott told MPs.

Once one referendum had come out in favour of a regional assembly then other areas would follow, Mr Prescott suggested.

He said the new bodies would have "real power and funding to improve the quality of life of people in their region, particularly by improving regional economic performance".

Good performance

The assemblies would be funded primarily by government grant, with "complete freedom" to spend it towards government-agreed targets.

Funding for regional assemblies

Government grants Surcharge on council tax Borrowing 'Rewards' for good performance

They would also raise funds by borrowing and through a precept - or surcharge - on council tax.

Assemblies may also be rewarded for good performance by extra government money.

On current expenditure, regional budgets would be around �350m a year for the North East and �730m for the North West.

Enthusiasm

A poll commissioned by the BBC earlier this year suggested there was some public support for regional assemblies.

The north-east is the most enthusiastic region, and it is here where the first assembly would be expected to be set up.

This would cost an estimated �20m and would probably sit in Durham with a leader and a board of elected members.

Areas such as the south-west and north-west, where people have complained their voices are not heard strongly enough by central government, could also be keen.