THE CBI was last night accused of muddying the waters in the debate over regional Government.

The employers' body said its members had given plans for an elected assembly in the North-East a vote of no confidence.

It claimed an assembly could undermine the efforts of Regional Development Agencies (RDAs) such as One NorthEast by subjecting them to "unhelpful party political interference".

But last night John Williams, deputy chairman of One NorthEast and leader of Darlington Borough Council, said he rejected the CBI's criticisms.

He said: "It seems the CBI has misunderstood the Government's plans for RDAs.

"Whatever happens with a regional assembly, we will still have an arms length board substantially made up of private sector members and led by a chair with a business background.

"Far from weakening the regional economy, this makes us stronger and more responsive to the region's needs."

The CBI said the only way to attract more business people to regional bodies was by making them more dynamic.

A regional assembly would also make little difference to business, whose input would be limited, it said.

The confederation also questioned the leadership quality of those likely to win positions in the new assembly, with Neil Herron, of campaign group the North-East Against Regional Assemblies, saying the assembly would be an "expensive talking shop for self-serving politicians".

But Jane Thomas, secretary of the Campaign for the English Regions, said: "To suggest there is no talent in the regions is quite frankly an insult.

"The recent announcement that Joyce Quin MP, a senior Labour Party backbencher and former cabinet minister, is to stand down at the next election in order to engage fully in North-East regional politics speaks for itself.

"More importantly, what the CBI has to say is just one view among many in the business community."

In a recent postal service carried out by the North East Chamber of Commerce, 70 per cent of businesses believed more decisions ought to be taken in the region and half felt an elected assembly was the right way forward. But the CBI's reaction came after a consultation with firms in all of the English regions.