John Prescott struggled last night to convert the North-East business community to his vision for a regional assembly.

The Deputy Prime Minister, on the final leg of a whirlwind tour of the North, made an impassioned plea for the region's economic leaders to embrace the idea of a regional voice on regional affairs.

Mr Prescott went over plans first published in a Government White Paper in May 2002 for a 25-strong elected assembly that would have responsibility for economic development, housing, sport and other regional affairs which will be the subject of a referendum this autumn.

He said: "I like to call it a great North vote for a great North region."

He said the North-East, North-West and Yorkshire would have control of a total £500m a year budget to operate regional fire and rescue services.

He also hinted that certain aspects of training and skills, currently operated nationally by the Learning and Skills Council, could fall within the remit of a regional assembly.

He said that collectively, 14 million people in the North represented by three regional assemblies would have "one big clout" when it came to redressing the economic balance between the North and the South.

The audience, drawn from the business community and gathered at the Vermont Hotel, in Newcastle, heard arguments for and against the proposals.

Joe Docherty, chief executive of Tees Valley Regeneration, pointed to the successful working partnership between the Greater London Authority and businesses in the capital as an example of how the regional assembly could work.

But Sunderland shopkeeper Neil Herron said a blueprint was needed to convince the region.

He said: "There is question after question, and we are not hearing any convincing arguments here.

"No matter how hard you polish a Reliant Robin, it is never going to be a Ferrari."

Rod Taylor, chairman of the regional CBI, said the Government was still asking for a leap of faith because there had not been enough substance in any of the arguments in favour of a regional assembly to convince business people.

After the question and answer session, Steve Rankin, regional director of the CBI, said: "There is big concern as there is an awful lot said about devolving to the region, but the real scepticism is based on sound evidence that central government departments will simply not let go of the reins."

Bob Davies, chief executive of Arriva Transport Group, said: "At the moment the proposition on the table is an elected assembly of 25 people, but what about the technicalities and things that show how operating, making decisions and employing those decisions is actually going to work?"

But other businessman at the event were less sceptical.

Sir John Hall told The Northern Echo: "We need a new raison d'tre. What is going to be the basis of our new industry? It is time to concentrate on our small-to-medium enterprises.

"It is going to take a mind-change of everyone in the region, and it has to be a revolution."