LONG delays to handing out cash from the flagship “regional growth fund” were blamed on the slow death of the Northwest Development Agency (NWDA) yesterday.

No grants have been distributed in Merseyside from the first round of the scheme – nearly seven months after four job-creating projects were given the go-ahead.

The Government has brushed off criticism of the hold-ups, insisting that “due diligence” tests must be passed by the successful companies before taxpayers’ money can be handed over.

But it has now emerged that such work was formerly carried out on behalf of the firms by staff at the doomed NWDA, which is being rapidly run down.

Now the companies have been forced to employ private consultants and lawyers – with the cost effectively top-sliced off the headline grant figure.

The controversy blew up alongside a second row over the awarding of a £5.9m grant, from the second round of awards, to Redx Pharma, to support a project that will create up to 250 jobs in Liverpool.

The company, which is based at MerseyBIO in Toxteth and wants to create a new oncology chemistry centre, is part-owned by venture capitalist John Moulton, who sits on the panel choosing the winning bids.

Leading a Commons debate, Labour MP Angela Smith protested there was “not much clarity or transparency in a process like this”.