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The South West Regional Development Agency (RDA), which channels millions of pounds into the local economy every year, is to be abolished.

The government has confirmed its intention to replace RDAs with Local Enterprise Partnerships.

The process will begin with a white paper to be published later in the summer.

An RDA spokesman said: "The RDA network accepts change is coming and we are ready for it."

The South West RDA, which employs about 350 people, is responsible for distributing £230m of European Union funds across the region between 2009 and 2011.

It runs big schemes like the Wave Hub wave energy project off the Cornish coast.

The government said in its emergency Budget it was planning to replace RDAs around the country with the aim of "improved co-ordination" of investment in the economy.

A spokesman for the RDA said: "In the transition to new arrangements, RDAs' responsibility is clear - to support and help government deliver their objectives.

"We recognise that funding available for economic development work will be more limited in the next few years given the need to tackle the public deficit."