BUSINESS leaders have accused the government of lacking a "coherent strategy" to pull the region out of its economic slump - with just days to go to a crucial Budget.

And they have demanded that ministers pull back from handing extra economic muscle to Scotland, until the North-East is given a "fairer funding settlement".

The twin messages were given by the North-East Chamber of Commerce (NECC) to a meeting of the region's Labour MPs, ahead of next Wednesday's Budget statement.

In many ways, the briefing struck an optimistic note despite a "sluggish recovery" from deep recession, pointing out that both exports and private-sector employment were up slightly.

However, the NECC laid bare that it believed the achievements were despite - rather than because of - the economic direction from Downing Street.

The briefing read: "North-East businesses are helping to rebalance the UK economy, but we await a coherent government strategy to follow through on this commitment."

The verdict echoes the embarrassing warning of Vince Cable, the Liberal Democrat Business Secretary, in a leaked letter last week, that the Coalition lacked a "compelling vision".

The document also revealed growing frustration at the extra economic power being handed to Edinburgh - while Scotland continues to receive massive extra state funding, under the 30-year-old Barnett Formula.

The Scotland Bill, currently before parliament, will deliver an extra £12bn of spending power, through the ability to issue bonds to raise cash from capital markets and borrow against future business rates.

Only last week, the £3bn Green Investment Bank (GIB) was handed to Edinburgh - rejecting numerous bids from the North of England and triggering accusations that the decision was a "pawn" to try to persuade Scotland not to break up the UK.

The NECC briefing demands: "No further devolution of tax-setting measures to Scotland without a fairer funding settlement."

Helen Goodman, Labour MP for Bishop Auckland, said: "This is the voice of business in the North-East, making a major criticism of the government "The job cuts in the public sector will not lead to new private-sector jobs unless the government gives people the skills they need."

The NECC, which represents more than 4,000 businesses, employing around 30 per cent of the region's workforce, also urged Chancellor George Osborne to: * Increase capital allowances for green investment.

* Increase rate relief for empty properties.

* Cut employer national insurance contributions for young people - to encourage recruitment.

* Extend financial incentives to train apprentices to existing apprenticeships - and make them permanent.

* Cut regulation deterring companies from employing new staff.

Andrew Sugden, the NECC's policy director, said: "Our submission is both pragmatic and realistic. Give us the tools to do the job and we will demonstrate what we can achieve."