POLITICIANS in Derwentside have raised concerns about proposals to hand powers to run transport, housing and economic development to a regional body.

A report by a local government think tank said only a powerful "city region", based in Newcastle-Gateshead, will allow north Durham to close the wealth gap with London.

The study concluded the new body would enjoy extra freedoms to borrow money for major projects, attract investment, plan main roads and raise taxes.

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.

However north Durham MP Kevan Jones said: "There is no doubt Newcastle-Gateshead is the economic powerhouse of the region.

"But the last thing the electorate of the North-East wants to see is regional government in another name.

"What they want to see in my constituency is more delivery on the ground.

"There would be a strong reaction to being ruled by Newcastle, and people want to see development and they are not interested in seeing power go to a regional body."

Derwentside District Council leader Alex Watson said the local authority had concerns about the proposal.

But he also feelt the city region was inevitable, and said the authority should climb on board should it come into effect.

He said: "It would be pointless to reject it completely, but I am not totally happy with it.

"It has caused immense concern, because people feel the allocation will be for the benefit of the city so we need to make sure that we do not miss out.

"The districts and rural areas have got to be proactive so that, if they do come into effect, it is going to be fair deals all round."