SIR John Hall is to assist the Tories in effectively scrapping the regional development agency One North East.

Sir John, who created the MetroCentre and chaired Newcastle United, is to join a Tees Valley working group that will enable the party to hit the ground running should David Cameron win the Generat Election next spring.

The Conservatives also called yesterday for the selection of One North East’s new chairman to be halted.

In response, Labour said the plans would “undermine local industry” and create “a talking shop that has no power”.

Nationally, the Conservatives plan to scrap regional development agencies, which include Yorkshire Forward, although north of the Tees, One NorthEast could be allowed to remain in a drastically slimmed down form to work solely on large inward investment projects.

In will come sub-regional Local Enterprise Partnerships, which would be dominated by local businessmen and councils and would “encourage the delivery of support for local business at local level”.

James Wharton, Conservative candidate for Stockton South, said: “We rejected regional government at a referendum, yet by passing new powers to One North East we gave it by the back door.

“Tees Valley is sick of playing second fiddle to a large Tyneside- based agency. These reforms ensure we have a real say over real resources that can be used to offer real help to our area.”

Sir John, who campaigned against the Tories in favour of regional government, is to sit on the Tees Valley’s local partnership.

Dari Taylor, Labour MP for Stockton South, defended the agency, saying every pound it spent generated four times as much economic activity.

She said: “The Tories will get rid of an agency which has supported the development of offshore wind [farms], biofuels, the electric car and now long-mileage batteries.

“They want to strip it of leadership and purpose just when businesses need it the most. The Tories’ policy is in a real mess and I’m not sure even they know what it is.

They are adding to uncertainty and undermining efforts to help the region’s economy.”

Mr Wharton, whose party has a 17-point lead over Labour in the national polls, also called for London headhunters to stop searching for One North East’s new chairman.

The three-day-a-week post is offered with a £81,718- a-year salary.

He said: “The selection process will finish in March and will cost a fortune. We want it suspended so that, if the Government changes, a chairman can be selected under new terms of reference.”

One North East’s budget this year is £249m, dropping to £195m next year.

The Liberal Democrats also plan to scrap the regional development agencies.

Others who will sit on the new Conservative partnership include Paul Booth, president of Sabic Petrochemicals on Teesside, Peter Olsen, chairman of Housing Hartlepool, Robin Davison, of Wolviston Management Services, and Graham Robb, of Recognition Marketing, in Darlington.