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The North East risks losing £900m of investment because of delays approving plans for a directly-elected mayor, the government has warned.

The Secretary of State for Communities, Sajid Javid, has told the region's council leaders that time to implement a devolution deal is running out.

Elections for directly-elected mayors are due to be held in a number of areas of England in May 2017.

However, critics say the plan will not deliver the promised benefits.

In a letter sent to the councils which make up the North East Combined Authority, and which has been seen by the �鶹Լ��, Mr Javid said: "I reaffirm the government's commitment to implementing the North East devolution deal in full.

"[However] without an elected mayor the deal cannot progress.

"There is a significant risk now that we will run out of time to implement the deal unless you publish your governance review and scheme, and move forward with the consultation immediately."

The deal is part of the government's Northern Powerhouse programme to help Northern towns and cities compete with those in the South for investment.

'Left out'

Council leaders from Labour-led Durham County Council, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland met earlier to discuss the way forward, but it is understood divisions remain.

Gateshead previously voted against the deal. Teesside has its own plans for an elected mayor.

Implementation of the plan would see the region receive £30m government funding for the next 30 years as well as new powers on transport, skills and training.

Nick Forbes, Newcastle City Council leader, said: "Other parts of England like Manchester, Birmingham and Liverpool will press ahead and if we don't get alongside my fear is the North East will be overlooked and left out.

"There's a very real chance our region's economy will suffer."

The union Unison is among opponents of the plan.

Regional secretary Clare Williams said: "To have one person representing Berwick down to Barnard Castle can't be good for democracy.

"We have local councils who are elected by their communities, so we're against being told by this government we have to have an elected mayor."