REGIONAL Development Agencies need to be overhauled to give them a new image and stronger leadership, the Confederation of British Industry (CBI) has said.

The employers' organisation said the remit of the English agencies are too broad and they suffered from Whitehall interference.

The RDAs promote economic development, but the CBI said they were not fulfilling their potential.

CBI deputy director general John Cridland said: "Business thought it was promised a lion, but the initial reality was closer to a mouse."

Responding to the report, Mike Collier, chief executive of One NorthEast said: "The CBI's report makes for interesting reading, and we are encouraged that the findings generally back-up the work One NorthEast has been doing in the region since our inception in 1999.

"From April 2002, One NorthEast will have a single pot of funding and much greater flexibility to use this to address the priorities of the North-East. We have also restructured to ensure that we are able to realise the potential of the RDA in the Region.

"In line with the broad findings of the CBI's report, we are now able to push on with an increasingly effective role for the agency. This will include a particular focus on fully engaging with business rightly identified by the report as a priority.

"But this is a two-way process and we look forward to working with our regional partners and the CBI as we continue to involve the whole business community."