DURING the last eight months or so, the North-East thought it had sensed a subtle shift in the Labour Government's interest in regional politics.

The Government had been stung by accusations that it had neglected its grass-roots and by suggestions that it had a "control-freak" nature. It had also had time to forget its embarrassments in London and Wales where the wrong men had ended up running the show.

And it had taken emergency short-term measures to address shortages of public sector workers, like nurses and teachers, in the South-East. These improved pay packages may have temporarily alleviated the shortages in the South, but they had done nothing to address the core problem: the weakness of the North which was driving people to the South where they needed bigger schools and hospitals.

The North-East then found itself caught in a pincer movement when the Scottish parliament increased teachers pay and reduced their working hours to 35 a week. The region's teachers can now move north or south for better financial reward.

All of which encouraged Cabinet ministers like John Prescott and David Blunkett to again make positive noises about regional government being a way of righting the imbalance.

Then came Labour's extraordinary show of strength at the Riverside Stadium in Middlesbrough when Mr Prescott, Gordon Brown and five other ministers all arrived to make a relatively modest change to the way regional development agencies are allowed to spend their money. And, at the end of March, Peter Mandelson made an extraordinary conversion to the regional cause. The MP for Hartlepool unveiled a very detailed plan for an assembly made up of elected representatives and people appointed from business and education.

"We need to decentralise power to both regional and local levels and to distribute power to where it is most effectively exercised and I believe that greater focus at regional level is justified," he said.

But when Tony Blair visited The Northern Echo offices on Thursday, he shared none of his old friend's enthusiasm. In fact, whereas Mr Mandelson was convinced, Mr Blair was, at best, lukewarm.

"I have an open mind and in the Northern region there's probably the strongest movement for it, but we have to be careful we are not just adding another layer of government," he said.

"It has to be decided here in the region whether there is a regional assembly. People have to debate that and also look at the other changes that are necessary because I don't think you can leave the rest of local government unchanged if you have regional government on top."

This is at odds with Mr Mandelson's belief that regional government should not be at the expense of existing local authorities.

Mr Blair steered the discussion on to how the Government had indirectly given greater powers to local areas.

"We continue to drive forward a programme of decentralisation and that includes more powers for the regions," he said. "There has been substantial devolution through the RDAs and the government offices."

Then he spoke of the money sent directly to local schools for books and computers and the increased roles of local primary care trusts in the health service, as examples of how Labour had given power back to local communities.

He naturally refused to be drawn on what Labour's manifesto will say about devolution which can only leave the North-East speculating about whether it will get an early referendum on its own assembly, as Mr Mandelson would like, or whether it will continue to receive the drip-drip of devolved powers with which Mr Blair appears to be happy.