PLANS to overhaul local government have sparked a scramble as local authorities vie to protect their interests.

The Government is proposing to set up a regional assembly in the North-East and, if approved, there will be a huge shake-up in local government.

The two-tier system, whereby Durham County Council provides some services and the district councils provide others, would be abolished.

The Boundary Commission has invited councils to submit their proposals for change. These will be judged and the best will be put to residents in a referendum probably next year.

Earlier this year, all seven district and borough councils commissioned a study from experts.

The results suggested splitting the county into three unitary authorities, made up of mergers between Derwentside and Chester-le-Street district councils, Easington district and Durham City council, and Wear Valley, Teesdale district and Sedgefield borough.

The county council dislikes this and has put its case for a single, county-wide body.

Chester-le-Street has voted to put forward its own proposals based on Chester-le-Street and Durham City, with the others based on Easington/Sedgefield and Derwentside/Wear Valley/Teesdale.

Simon Henig, deputy leader of Chester-le-Street, said: "We don't see any problem with councils putting forward different options.

"We feel this is a once in a lifetime opportunity for change and that there are strong links between Durham and Chester. This can be doemonstrated through transport links, links between district councils in leisure and environmental services and the fact that a large nunber of local bodies already cover Durham and Chester-le-Street area.

"Our fallback position would be to include the area around Stanley with Durham and Chester, with Consett going to Wear Valley and Teesdale."

Liberal Democrat-run Durham City has voted to keep Durham separate. The city would become a fourth unitary authority, by expanding to swallow up places like Sacriston, Plawsworth and Langley Park, plus Spennymoor and Ferryhill.

All the authorities are now racing to put their submissions to the Boundary Commission, before Monday's deadline. The commission will make its first report on the proposals in December.

* The county's case: Page 4