THE Archbishop of Canterbury clashed with Lord Heseltine, who accused him of making “silly” claims that the Government is neglecting the North.

The Most Reverend Justin Welby was branded “out of touch” and “factually wrong” after arguing a ground-breaking call for radical devolution to the regions had been shelved.

In fact, Lord Heseltine said, the Government was taking radical steps to “restore opportunity and power and discretion” to local leaders.

And, asked about the Archbishop’s claim that ministers had failed to act on his ‘No Stone Unturned’ devolution call, he replied: “It is silly to say it's been ignored.”

The extraordinary row blew up after Mr Welby – the Bishop of Durham, until 2013 – issued a blistering attack on Britain’s recovery, arguing entire regions were “trapped in an apparently inescapable economic downward spiral”.

He warned of “a tale of two cities” - a constantly improving London and South-East, but with much of the rest of Britain “left feeling abandoned and hopeless”.

And Mr Welby specifically attacked the failure to implement research “to tackle this vicious circle” – in particular, Lord Heseltine's report No Stone Unturned.

He said: “Their conclusions have not been taken as seriously as they should have been and remain, in large part, ignored. Much of England is experiencing economic crisis.”

No.10 declined to be drawn into a row, arguing the Government was rebalancing the economy and denying the intervention had a “party political angle”.

But Lord Heseltine, the former Conservative deputy prime minister, let rip on Radio Four, saying: “The words are just factually wrong. I think it is simply out of touch.

"The speeches that the Chancellor has been making recently in the North are the most imaginative and strategic speeches about rebalancing this country that I have ever seen a Chancellor make.

"And the cities minister, Greg Clark, has negotiated arrangements with every part of England to give more power economically to every town, city, county in this country.

"I have spent some 30 to 40 years dealing with local authority leaders across England and the transformation - and they acknowledge this - is extraordinary.”

In the summer, the Government handed out the first allocations from a £2bn annual spending pot, for housing, transport and skills – but much had been earmarked for devolution anyway

And the sum falls woefully short of the £12bn-plus of annual Whitehall spending which Lord Heseltine had urged ministers to hand over, to local enterprise partnerships (LEPs).

Since then, George Osborne has pledged more ambitious devolution deals for city-regions, but only if they agree to be led by a ‘metro mayor’ ruling across council boundaries.

Mr Welby’s joint intervention, with the Archbishop of York, timed for the looming general election, also criticised a belief that economic growth is automatically the solution to social problems.