A "SUPER-NEWCASTLE" should be handed powers to run transport, housing and economic development for much of the North-East, the Government will be told today.

A report by a local government thinktank says only a powerful "city region" - based in Newcastle-Gateshead - will allow the North-East to close the wealth gap with London.

The city region should also enjoy extra freedoms to borrow money for major projects, attract investment, plan major roads and even raise taxes, the study concludes.

The report, by the New Local Government Network (NLGN), was immediately welcomed as a "useful contribution to the debate" by Local Government Minister David Miliband.

He has been visiting all of England's "core cities" as the Government explores new ways of boosting the regions, following the failure of elected regional assemblies.

Controversially, the study proposes that funds currently allocated for the region by development agency One Northeast should be channelled through the "city-region".

That could fuel suspicions that Newcastle-Gateshead would be given extra muscle, at the expense of other areas on its fringes.

Although local authorities would form partnerships to exercise the new powers, the Government should give "active encouragement" where they refuse, the NLGN insists.

And, because the structure of local government would remain the same, there is no need for a referendum before the extra powers are handed over, it says.

The study concludes: "Unlike existing local authorities, city regions would bring scale and more readily identifiable presence.

"The NLGN urges the more natural city regions of England to be brave and blaze a trail, to set aside existing vested interests and to demand a louder voice for their wider community."

The thinktank proposes Manchester, Birmingham and Liverpool as "obvious" city regions, with Newcastle-Gateshead, Sheffield and Bristol also likely contenders.

Its report is the first detailed attempt to map out new mechanisms for the English regions since North-East voters killed off any prospect for elected assemblies in last year's referendum.

Some of the commission's members argued for the city regions to take over all the powers exercised by the regional development agencies.

As well as the leader of Gateshead Council, senior figures from Birmingham, Sheffield, Manchester and Liverpool sat on the City Regions Commission, to be unveiled in Manchester today.