THE North-East and North Yorkshire will be the first to cast their votes in an historic referendum on home rule.

Deputy Prime Minister John Prescott announced yesterday that there was enough interest for the two regions and the North-West to vote for assemblies by autumn 2004 - with the first ones running as early as 2006.

He said elected regional assemblies would bring greater democracy and "a new political voice to the regions" in a move which would see power channelled from Westminster.

Home-rule campaigners across the region last night welcomed the announcement as a milestone in the path towards a new era in regional government.

Brian Hall, co-ordinator for the Campaign for a North-East Assembly, said: "This is our big chance to take power away from London and make some of our own decisions here in the region.

"The vote itself will be a massive crossroads for North-East England, and we believe that the people here will seize this once-in-a-lifetime opportunity."

Peter Box, chairman of the Yorkshire and Humber Assembly, said he was delighted people would get a chance to vote in a referendum.

Mr Prescott said the assemblies would get real powers for economic development, jobs, investment, transport, planning, housing, culture, arts and sport. Powers would be taken from the Government, and not from local authorities, he said.

He said a review of existing county, district and borough councils would be carried out by the Boundary Committee for England, with the aim of creating one-tier local government in North Yorkshire, County Durham, Northumberland, Cheshire, Cumbria and Lancashire.

But there were fears in North Yorkshire that the region could end up being ruled by an assembly based in Leeds or Bradford, with little grasp of rural problems.

Councillor Eileen Bosomworth, leader of Scarborough Borough Council, said a new unitary authority based on the county council would also be a "retrograde step".

She said: "The creation of such a large unitary authority across a region as diverse and sparse as this would take democracy further away, rather than closer.

"It would be extremely damaging and certainly not in the best interests of local people who we represent."

Reaction to the announcement was split, with North-East Labour MPs welcoming the plans and North Yorkshire Conservatives condemning them.

Writing in today's Northern Echo, Peter Mandelson, Hartlepool MP and former cabinet minister, said the plans represented "a chance for the North-East to take off".

He also called for an assembly to be based in Durham, not Newcastle, with its committees sitting around the region.

Bishop Auckland's Labour MP Derek Foster said he was delighted by the move.

He said: "This is an opportunity for the North-East to say 'yes we want a voice'."

Meanwhile, the Conservatives branded the assemblies, which will cost about £25m to set up, a white elephant.

John Weighell, North Yorkshire County Council's Tory leader, said few people knew anything about what was being planned.

He said: "The proposed powers of this are very, very limited and people don't realise that.

"It's not a government for Yorkshire at all."

Timothy Kirkhope, Conservative MEP for Yorkshire and the Humber, said: "It would simply be another costly talking shop with very few actual powers."

Others spelled out their anger at the plans. Neil Herron of campaign group North-East Against Regional Assembly, said: "Assemblies will further remove local people from the decision making, and this Government is facing a major backlash from its Labour heartlands."