A NEW body to win private-sector jobs for part of the region was finally approved yesterday – three months after ministers ruled its proposals did not come up to scratch.

A local enterprise partnership (LEP) – covering County Durham, Tyne and Wear and Northumberland – was backed by the Department for Business and will start work in “shadow”

form.

It is intended to plug the gap left by the looming abolition of the One North East development agency, although it will have no budget of its own and far fewer powers.

Primarily, LEPs – one covering the Tees Valley was approved in October – will co-ordinate private- sector led bids for cash from the Government’s £500m regional growth fund, designed to drive economic recovery.

But it is being established too late to apply for grants in the first round of bidding. The deadline is only one week away – January 21.

In November, the proposal for a North-East LEP – for the areas not covered by the Tees Valley LEP – was described by the Government as “disappointing” and “very fragmented”.

But, announcing the go-ahead, Decentralisation Minister Greg Clark said: “This latest local enterprise partnership is a crucial one – completing the North-East picture.”

In the Commons, Grahame Morris, the Easington MP, welcomed the move, but raised the alarm over the winding down of One NorthEast, which is not due to be replaced by the LEPs until March 2012.

The Labour backbencher said: “There are concerns that, in the transition period, there will be a vacuum and we will not be able to encourage investment, or secure the regeneration jobs that we require.”

Meanwhile, Sir Alan Beith, Liberal Democrat MP for Berwick, warned that the two LEPS would struggle to promote the key industry of tourism – a role performed by the development agency.

And other MPs raised the alarm over the decision to hand Communities Secretary Eric Pickles responsibility for the European Regional Development Fund, which is delivering £324m of vital aid to the region, over seven years.

Until now, a team of council and business leaders at One North East has assessed projects applying for cash.

A total of 28 local enterprise partnerships have now been set up across England, although many areas are still not covered.