HUNDREDS of jobs could be axed as part of a radical shake-up in the way county and district councils serve the region.

Thursday's historic White Paper, giving far-reaching powers for home rule, is likely to see the end of Durham, North Yorkshire and Northumberland County Councils - along with the district councils.

In a pre-emptive strike at Durham County Hall yesterday, county council leader Ken Manton and chief executive Kingsley Smith outlined their vision for one large unitary authority.

They said an alternative of creating three unitary authorities could cost £71m - an estimated figure from Cambridge Professor Michael Chisholm based on the local government review of the 1990s.

A regional assembly would spearhead economic development, they said, but the cost had to be considered.

About ten per cent of council officers could lose their jobs in the shake-up, and the 370-strong body of councillors cut by two-thirds. The six district authorities in County Durham employ more than 3,000 people.

Mr Smith said: "I can see this fantastic scenario with a regional assembly and a very good cost-effective delivery of services through one unitary authority.

"I would suggest that 90 per cent of employees would automatically go in to that authority."

Defending any job cuts, Coun Manton said: "Local government doesn't exist to provide work for its employees. At the end of the day it's about providing services on the ground rather than creating jobs."

He said the county council, which employs 16,000, would use the seven local strategic partnerships across the county and town and parish councils as a key to keeping in touch with local communities.

They pressed the case for the headquarters of any assembly to be at Aykley Heads in Durham, and pledged they were keen to work with the district councils on any shake-up.

But some district councils expressed disappointment that a solution was already being touted before they had been consulted.

A single unitary authority would be too large to meet local needs, they said, although they concede a system with two or three unitary authorities could be the way forward.

Paul Wilding, chief executive of Easington District Council in east Durham, said the two-tier status quo of county and district councils was flawed, but added: "What we need to have is a discussion among all the local authorities, district and county, to come up with a unitary system that will meet the needs of the community and recognise the diversity in the county".

Iain Phillips, chief executive of Wear Valley District Council, County Durham, said: "I would welcome the White Paper and support unitary local government, but I can't conceive that the best way of doing that would be something as large as the county.

"That would take away from local people any opportunity they had of influencing local events."

He said he would support the districts being amalgamated, in the east and west, rather than north and south.

Coun John Weighell, leader of North Yorkshire County Council, said its aim was to continue working in partnership with the district councils.

"Regional government is simply not a top priority - better schools, better roads and betters social services are," he said.