THE Conservatives are frantically rethinking their pledge to axe regional development agencies (RDAs) after an angry backlash from business groups.

Ken Clarke, the party’s business spokesman, revealed that he had ordered a review – only weeks before the election manifesto is finalised – after admitting the current policy was not clear.

The move follows criticism from the Tory-friendly CBI and British Chambers of Commerce that scrapping RDAs would fail to deliver the “strategic infrastructure which business thinks is so important”.

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It was immediately seized on by Labour as proof that the Tories were in disarray in a policy area crucially important in the North-East and Yorkshire.

Mr Clarke’s intervention is also a humiliating setback for communities spokeswoman Caroline Spelman, who proposed replacing RDAs with town hall-led “local enterprise partnerships” with businesses.

Under that plan, the legislation that created One North East and Yorkshire Forward would be repealed and their funding streams from Whitehall cut off.

Ms Spelman later suggested a drastically slimmed down RDA could survive where it was popular, but it would be stripped of powers over housing and planning, concentrating simply on business support.

Speaking to The Northern Echo at Westminster, Mr Clarke said he was insisting on a review to decide whether RDAs should be axed and started with no “fixed views”.

He said: “We will then, finally, decide if there is any case for continuing with regional development agencies.

I’ve been debating with my colleagues very recently.

“You plainly require a level of government below the national level, bringing with it local knowledge and expertise and proper partnership with local people, below the level of Whitehall.”

Mr Clark said he retained his scepticism about the value of RDAs, but added: “Having said that, they all do some good things. To be fair to them, some of them can point to playing a very important role.”

Asked about the fastapproaching election, he admitted: “We must take the final decision before we take office, I agree with you.”

Pat McFadden, the Business Minister, said: “First it was tax, now it’s RDAs. Every time a Tory policy is exposed to scrutiny the result is chaos.

“David Cameron has called RDAs a complete waste, yet they help support industry, investment and jobs around the country. They have been instrumental in supporting businesses through the recession.”