The Confederation of British Industry (CBI) has attacked plans for elected regional assemblies in England.

Deputy prime minister John Prescott is leading the government's quest to implement the 1997 Labour Party manifesto pledge to extend devolution across England.

However, responding to the government's white paper on devolution, the CBI says assemblies would damage business rather than improve regional economies.

The organisation sets out five key tests for improving economic and political performance in the regions which, it claims, are not fulfilled by the government's proposals.

The CBI's five key tests

Would elected assemblies improve economic performance? Would they improve decision making? Would they enjoy the confidence of businesses? Would they strengthen democracy? Would they be cost neutral

John Cridland, CBI Deputy Director-General, said: "Employers want stronger regional economies, but there is little evidence to suggest elected assemblies will make a difference.

"The problems are managerial, not political.

" Assemblies would jeopardise the freedom of regional development agencies (RDAs) by subjecting them to unhelpful party political interference."

The CBI claims Scottish and Welsh devolution, along with the new government for London, has failed to result in benefits for business.

It also stresses that elections for those three bodies have failed to increase voter turnout and involvement while resulting in increased costs to the taxpayer.

'Talking shops'

Mr Cridland, referring to the devolved institutions, said: "Like voters, business judges institutions by the tangible difference they make and the value they add to the lives of everyone.

"Mr Prescott should take stock and learn from the past before moving on."

Recently, business leaders pulled out of the unelected North West regional assembly claiming it was nothing more than a "talking shop".

Digby Jones will speak at the Labour conference

Chris Clifford, North West CBI director, said: "We tried to engage constructively, but we were not treated as true partners.

"Using business to legitimise an institution without asking for genuine input is not what we call consultation."

The CBI is lobbying government for a greater role for RDAs which, it says, are accountable to local politicians but involve business far more than assemblies would.

The row between business and Whitehall is set to continue with the CBI staging a fringe meeting on regional assemblies at the upcoming Labour Party conference.

Government minister Nick Raynsford will debate with Digby Jones, CBI director-general, on the benefits and pitfalls of regional devolution.