THE North West Development Agency (NWDA) will be scrapped by a Tory government and its powers handed to local councils, Caroline Spelman confirmed.

The 1998 Act which created bodies charged with attracting investment and jobs in every English region would be repealed , she said.

The Shadow Secretary of State for Communities and Local Government added that groups of local authorities would be allowed to continue to co-operate on business development, which could allow a stripped-down NWDA to stagger on in some form.

But with its key responsibilities – in particular housing, planning and economic strategy– taken away, it would be a development agency in name only.

The Conservatives have long been hostile to regional development agencies (RDAs), highlighting their £200m annual running costs and the plethora of outposts opened up overseas.

But, until now, the party had hinted they could survive in the north, even if they were wiped away in the south where they have less public recognition.

The new policy will be seized on by Labour as evidence that the Tories lack commitment to spreading wealth and jobs away from the South East, particularly when the RDAs are playing a key role in fighting the recession.

Mrs Spelman said: “The RDAs will go and their powers will be given to local government. But, if local authorities want to club together and have a development agency, they can take a decision to bring it back.”