A FLAGSHIP £500m Government fund to bring jobs to the North has not received a single bid – ten days before a deadline expires.

The admission – made by Lord Heseltine, David Cameron’s regeneration chief – threatens to heap embarrassment on the controversial regional growth fund (RGF).

The fund is already under fire because it is much smaller than the billions pumped through the doomed regional development agencies, including One North East and Yorkshire Forward.

Lord Heseltine also revealed that decisions on whether to grant aid to small or medium-sized companies will be made by banks, rather than his growth fund committee.

No bids below £1m will be accepted by the department for business (Bis) – which has instead asked such as Barclays and Lloyds to collect applications and tot them up to the £1m mark.

John Denham, Labour’s business spokesman, leapt on Lord Heseltine’s comments, saying: “With a minimum bid of £1m, the Tory-led Government risks excluding small business while ministers are presiding over a regional economic policy they admit is chaotic.”

Lord Heseltine toured Britain to drum up interest in the RGF – including visiting County Durham last month – after setting January 21 as the deadline for bids for the first tranche of cash.

But many local enterprise partnerships, the bodies expected to co-ordinate applications in partnership with companies, are still in the process of being set up.

Asked about progress yesterday, Lord Heseltine admitted: “I can’t tell you what bids we are going to get because, frankly, when I asked last Friday, we hadn’t had any.

“But they are all going to come in, and I suspect in quite large numbers, over the next couple of weeks.”

Under the fund’s rules, applications missing next week’s deadline will have to wait for a second round of bidding – for which no date has been announced.

In the meantime, One NorthEast and Yorkshire Forward have been ordered to break aid contracts with companies to save cash and will suffer a two-thirds funding cut next year.

However, a Bis spokeswoman said it planned to distribute only £250 to £300m of the £500m on offer next year in the first round.