A FURIOUS row blew up yesterday over government plans to make Mersey councils pay for new a body to win investment and jobs – as they are hit by 28% budget cuts.

Labour MPs turned their fire on Business Secretary Vince Cable, after he confirmed that Local Enterprise Partnerships (LEPs), which are replacing regional development agencies (RDAs), would receive no funding.

The MPs warned the decision – first revealed in the Daily Post last week – would undermine efforts to win private sector jobs and replace fast-disappearing public sector posts.

It comes just days after councils were told to brace themselves for budget cuts of 28% over the next four years, threatening services from elderly care to leisure centres and libraries.

Appearing before the all-party business select committee, Mr Cable said LEPs should bid for money from the £500m “regional growth fund”.

He added: “They will not have large offices and staff – those days have gone.

“If local authorities consider Local Enterprise Partnerships to be a useful vehicle, they may well wish to contribute. We are not allocating government funding to get them off the ground.”

But Adrian Bailey, the committee’s Labour chairman, attacked what he called a “very confused process”, that will see the RDAs wound down by March, 2012. He told Mr Cable: “You can’t just make an application to the regional growth fund on the back of an envelope. It has to be prepared and researched. It's quite a skilful process."