A poll of North-East businesses delivered a devastating rejection of regional government last night and reignited the debate over plans for self- government.

A survey released on the eve of the Labour Party conference showed a big majority of small businesses opposed to a North-East regional assembly.

But campaigners in favour of self-government attacked the survey as unrepresentative. They pointed to polls carried out among the wider public which show a majority in favour of the idea.

The North East Chamber of Commerce presented more than 4,000 members with questions identical to those in the official referendum on November 4.

Of nearly 900 responses, 74 per cent indicated they would vote No to an elected assembly unless the Government could prove it would significantly change people's lives.

The poll will be another headache for Prime Minister Tony Blair as the Labour Party conference opens today.

To date, business has been one of the leading sections of society to show an interest in the outcome of the vote.

The chamber has a diverse membership - from sole traders to multi-nationals and from all sectors - and the survey shows the Government has yet to address concerns throughout industry.

The three main fears were:

* that the assembly will add an extra layer of cost;

* that it could turn out to be a toothless talking shop;

* that an it could marginalise the region still further.

Chamber chief executive George Cowcher said: "This survey sends a stark warning that a major facet of the North-East community has yet to be convinced that a regional assembly would be a benefit."

Chamber president Alan Ferguson, executive chairman of Fergusons Transport, of Blyth, said: "The majority of businesses responding to the survey are just not convinced at all by the argument for an elected regional assembly in its current form."

Businesses in favour said an assembly would grow in status and influence.

Jeff Fryer, managing director of County Durham construction company M&M Plasline, said: "I scrape in as a Yes vote, despite being able to empathise with the No vote.

"We need to think positively to make it happen."

Durham County Council leader Ken Manton urged members to allow it time to develop and prove itself.

Leader of District of Easington Council Alan Napier, spokesman for the Local Choice - Local Voice group, which promotes a three unitary council option, said: "The information provided to businesses with the chamber's ballot paper was so biased and subjective that the result cannot be viewed as a fair assessment."

Ross Forbes, director of the Yes campaign, said: "The chamber survey is makeshift, badly structured and negatively presented."

Like the chamber, the CBI North East Council will not be telling members how to vote in this autumn's referendum.

Council member Bob Coxon, chairman of the Centre for Process Innovation on Teesside, said: "I firmly believe that an elected North- East Regional Assembly will benefit the business world.

Stockton North Labour MP Frank Cook said: "If there is any truth in that report, it demonstrates the level of myopia in some of our small and medium businesses."