Tony Blair's bid to put schools and hospitals first by reorganising his government will fail if policies are not carried out from the regions, Peter Mandelson warned yesterday.

As part of his post-election Cabinet reshuffle, the Prime Minister reworked Whitehall departments to focus on improvements in public services.

But former Cabinet minister Mr Mandelson said under Labour's first term local councils lived "in a blizzard of initiatives and deals" which were "impossible to disentangle".

And he blamed low voter turnout at the election on a "one-size-fits-all ethos" of central government dictating regional policy.

Mr Mandelson, forced to resign as Northern Ireland Secretary earlier this year following the cash-for-passports affair, was delivering his warning as he put forward the case for regional government.

In a speech at the University of Newcastle, the Hartlepool MP said he believed elected regional authorities were "an important element in constructing a state that works better and improves policy and service delivery on the ground".

He added: "New Labour's mandate is not for the status quo but for the continuing reform and modernisation of government and the public sector.

"The changes that have been made in recent weeks to the organisation of Whitehall, so that departmental structures place greater emphasis on effective implementation of policy, are to be welcomed.

"But without appropriate decentralisation and co-ordination of policy in the regions, I suggest this attempt to make government more effective will ultimately fail.

"We need to avoid the experience of the first term during which local councils and communities lived in a blizzard of initiatives, programmes and 'deals' which in themselves were usually welcome, but were almost impossible locally to disentangle and digest."

Mr Mandelson said a regional forum in the North East could help to rejuvenate the economic and industrial base of the region.

"It is morally unacceptable and economically undesirable to restrict the benefits of the 'winners' circle to certain individuals, geographical areas or economic sectors in Britain," he added.

"We need to bridge the gap between what Whitehall has to offer and what England expects and needs."

He said too many aspects of regional policy were designed centrally, and implemented by agencies and divisions of central government departments.

"They are mainly concerned with strengthening the delivery capacity of central government, rather than creating greater capacity in the regions themselves.

"This 'one size fits all' ethos simply enhances the perception that Whitehall knows best, and that there are few meaningful political choices that local communities are able to shape.

"I will not be the first or last person to link this syndrome to the dangerous spectre of low voter turnout in the recent general election and the need to renew British politics in order to overcome this."