Northern Powerhouse minister Andrew Percy accused the leaders of Gateshead, South Tyneside, Durham and Sunderland of “turning their back” on businesses and residents for failing to agree a devolution deal with authorities North of the Tyne in September.
On a visit to Newcastle hosted by Policy North, Mr Percy said: “Lots of business leaders and stakeholders in the North East were incredibly frustrated that North East council leaders chose to put politics and their own internal disputes ahead of local people and turn their back on them.”
Hexham MP Guy Opperman who was in Newcastle to welcome Mr Percy also reserved criticism for the four leaders.
He said: “What is clear to me is that the council leaders which failed to secure a deal will no longer hold the region back.
“Those council leaders, such as in Newcastle who are proactive, business focussed and willing to work together, now have a real opportunity to secure a new devolution deal.
“I think the people of Sunderland, South Tyneside, Gateshead and Durham will be asking why their councils are continuing to fail them.”
It was revealed on Friday that negotiations between officers at Northumberland County Council, Newcastle City Council and North Tyneside Council were currently taking place about an exit strategy from the North East Combined Authority (NECA).
The exit would enable the three authorities to forge ahead with their own devolution deal.
The original devolution plan was abandoned in September after Gateshead, Sunderland, Durham and South Tyneside councils voted to delay implementation.
The North East deal included an infrastructure fund of £30m per year for 30 years, making £900m in total; powers over bus franchising; strategic planning powers; joint responsibility for an Employment and Skills board and devolved skills funding for adults aged over 19.
NECA, led by the seven council leaders and chaired by the regional mayor, was also due to run the infrastructure fund, while the mayor would exercise other powers, such as control of bus services, in their own right.