Regional assemblies across the country are to be scrapped in a shock new move announced by the Government.

The decision could have huge ramifications in south-west Hertfordshire as it would mean that councils, whose councillors make up 70 per cent of the assembly, would lose control of the spending of tens of millions of pounds on housing, planning and transport - including the push to build thousands of new homes in Watford, Hertsmere, Three Rivers and Dacorum.

The move means the East Of England Regional Assembly (EERA), which was introduced in 1998, will be phased out from 2010 and its powers handed over to the East of England Development Agency (EDA), a Government quango set up to promote business.

The move has been criticised as it means the Government will have more power when it comes to issues such as housing quotas and the location of gipsy sites.

County Councillor Chris White, acting chairman of the East of England Regional Assembly and leader of the Liberal Democrats, said the news was worrying. Councillor White said: "The Government does not like people resisting housing numbers.

"Now figures will be decided ultimately by it and it can put them up whenever it wants to. "We will continue to fight the fight against housing, but I fear we lost on Tuesday."

Local Government Minister John Healey, who revealed the plans, says it aims to give local authorities and communities greater responsibility and opportunity to boost economic growth in their areas.

Richard Ellis, chair of EEDA, said: "Many of the changes announced today were called for by EEDA and our partners.

"We are pleased the Government has listened to us and our representation of the views of businesses and the region.

"Our new responsibility for producing a single regional strategy enables EEDA to champion the region's economic success more strongly.

"We intend to do this by working even more closely with local government, business, voluntary organisations and with our new regional minister.

"Clearly, local Government will be key in developing and agreeing the single regional strategy."