MERSEYSIDE’S political leaders were warned they must fight European funding plans that could see regeneration cash diverted away from the region to former Eastern bloc countries.

A report obtained by the Daily Post, put to the city region cabinet on Friday, states the Conservative-Liberal Democrat coalition’s position was “not favourable” to the area, with ministers supportive of “focusing resources on less prosperous member states”.

The Government says it wants to see a “significant increase” in the proportion of funding going to Eastern Europe.

But regional leaders said they feared the Government’s position could mean Merseyside would miss out on hundreds of millions of funding when the current round of European cash comes to an end in 2013.

The “super-cabinet” comprising the leaders of the six local authorities is now working with other UK regions to lobby for the European Commission to make sure urban areas are included in the “priority areas” for funding.

It is due to lobby both the Department for Business, Innovation and Skills, and the Department for Communities and Local Government to rethink the Government’s position. They will urge that Merseyside should be earmarked as a “transition region” which would entitle it to continued funding, but the Government is against the principle of “transition regions”.

The report states: “The position of the UK government is not favourable. Their priority is to limit the size of the EU budget and thus the UK contribution, regardless of how this may impact on component parts of the budget . . . There is also a growing mood towards national-central programmes because this will minimise administration costs.