THE most powerful argument against elected regional assemblies is that they would simply add another layer of government bureaucracy - and waste taxpayers' money.

Therefore, Tony Blair insisted last year that two-tier local government in Durham, North Yorkshire and Northumberland must be swept away if the assemblies are to be set up.

In their place would be created all-purpose unitary authorities - the system already in place across Tyne and Wear and what used to be called Cleveland, as well as in Darlington.

Now, the full impact of that shake-up can be seen in the proposals put forward by the Boundary Committee last night, which will be rubberstamped by Deputy Prime Minister John Prescott in July.

In each of the three counties, voters will be given two options on their October ballot paper, alongside the main question asking them if they want an assembly to be set up.

The first choice would, in effect, hand all powers to the existing county councils in each area which would be renamed to reflect their new status as "unitaries".

North Yorkshire County Council becomes North Yorkshire Council, Northumberland County Council is reborn as Northumberland Council and Durham County Council - most confusingly - as County Durham Council.

The second option would arguably be less baffling for voters, but would be a far more radical shake-up, would kill off the county names and would, presumably, be far more expensive.

Three unitaries would be created in County Durham, North Yorkshire would also have three and Northumberland would have two.

Durham County Council welcomed inclusion of the county-wide option, saying it has the most support.

The county currently provides major services, including education, waste disposal and social services, and has a budget of about £500m.

But the Labour-run authority, which is a keen supporter of a regional assembly, says that a new county authority - providing all local services as councils do on Teesside and in Tyne and Wear - is the best way forward.

The council says that, of 847 representations sent to the Boundary Committee, 686 expressed a first preference for the single council option.

Leader Ken Manton said: "This is even more telling than the outcome of the recent Mori survey, which showed that 36 per cent of those polled were in favour of a single all-purpose council, 27 per cent preferred the three-council option and 18 per cent the two council option."

The council believes the county option would be sufficiently large to "punch its weight" at regional level - particularly as it is close to the big unitary councils of Tyne and Wear - and that the Boundary Committee is leaning towards favouring bigger authorities.

Unsurprisingly, district councillors in County Durham favour the formation of three unitary authorities.

Six of the county's local authorities have formed a group to push the case for merging existing councils. Local Choice-Local Voice believes one "super" authority delivering services would be too big to be effective and not accountable to local people.

Chairman Robin Todd, who is also deputy leader of Easington District Council, said: "We believe such a huge council would be unmanageable and not locally accountable.

Wear Valley District Council leader Olive Brown said: "A single unitary authority in County Durham would be a risky experiment because it will be huge.

"I don't think it will be able to cope with such a hands-on approach as local authorities can. County Durham has got a mix of urban and rural areas. We want to be closer to the people and one authority would move away from this closeness."

The long-awaited recommendations from the Boundary Committee come after a hard-fought campaign by local authorities across North Yorkshire.

But the options now going forward to Mr Prescott for inclusion on the referendum ballet paper are unlikely to bring that campaigning to a halt.

The county authority has always favoured a single unitary body and was last night claiming a victory, saying its "convincing case" has been accepted by the committee.

And the six district councils were making similar claims, as their preferred option of splitting the county into three unitary bodies, is the other choice being put forward to Mr Prescott.

County council leader John Weighell said: "Having just one local authority is £21m cheaper than having three. That is money that should be spent delivering quality local services, not establishing three new councils."

Hambleton District Council leader Arthur Barker, speaking for the six districts, insisted: "We will create councils that are closer to the people."