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Middlesbrough Mayor Ray Mallon has accused the Northern Business Forum of trying to wreck his plans to create new jobs in Teesside.

There appears to be no getting round that.

But what of the flip side of the Government's strategy?

How can the private sector take up the slack and create new jobs?

That was the focus of a fringe meeting at the in Birmingham today.

Inevitably, the discussion turned to the Local Enterprise Partnerships (LEPs) that will replace regional development agencies like One North East.

It's hoped they can be part of the solution.

But news has reached here of the spat that's threatening to turn the plans for the North East's LEPs into a farce.

In an astonishingly-worded statement, , attempting to wreck the plans for a Tees Valley LEP.

It's all because the has seemingly changed its mind.

While initially it backed plans for five LEPs in the North East alongside a regional economic partnership, it now just wants to see one LEP for the whole North East.

It does not believe five individual LEPs will be able to compete with the likes of Greater Manchester, Leeds and Sheffield for investment and jobs.

Now bearing in mind these LEPs are supposed to bring businesses and politicians together in harmony, have a look at what Mr Mallon has had to say about the Northern Business Forum.

He said: "This would effectively see the North East revert back to a system where all funds are allocated to a giant regional quango based in Newcastle instead of directly to LEP areas. A quango that would no doubt employ those behind this U-turn.

"Let there be no misunderstanding, it is not the public sector that has failed to get its act together on this matter, it is certain elements of the private sector who seem happy to play fast and loose with the economic prosperity of this area...

"I am aware this NBF U-turn does not carry the full support of all its members and that it has instead been orchestrated by a bunch of self-serving mavericks more concerned with progressing their individual and organisational agendas than progressing the life chances of the people of the Tees Valley and the wider North East.

"Their actions have been entirely dishonourable and disingenuous from the outset and I will be telling them that to their face when next we meet. In hindsight I do not believe they ever had any intention of standing side by side with this area."

Phew. What chance of the two parties working together in harmony now?

I've heard it suggested that the Northern Business Forum's last minute intervention has prevented the Government giving the early go-ahead to the Tees Valley LEP.

That may explain why Mr Mallon might be feeling raw.

But the Northern Business Forum is no fringe organisation. It brings together the CBI, the North East Chamber of Commerce, the Institute of Directors, and many of the region's manufacturers. It's hard to ignore.

The consequences of could be serious though.

While the likes of Leeds and Sheffield can begin to draw up their bids for the £1bn Regional Growth Fund, and even begin recruiting people to run their LEPs, the North East looks divided and disorganised.

And here in Birmingham, opinion also seems to be split.

At the fringe meeting, Stockton councillor Ken Lupton backed plans to have a Tees Valley LEP, but former Newcastle United owner Sir John Hall, said a regional body was essential.

But some - including former Teesside MP Lord Michael Bates - believed the North East was in danger of becoming fixated with structures, rather than thinking about how you could allow businesses to create more jobs.

And their former Durham North candidate David Skelton suggested regional tax breaks might be the best way to help the North.

The question is though, can anything really be done to create new jobs quickly enough to replace the old ones, or is a surge in unemployment inevitable?

The North's dependence on the public sector has taken shape over decades. It isn't going to disappear overnight whether there's one or 100 LEPs.

The Politics Show will be discussing this very issue this weekend.

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