Decisions over Objective One money and other development funds are subject to "mind-numbing bureaucracy", a Cornish MP has claimed.
About £300m of Objective One cash is expected to be spent in Cornwall
Truro and St Austell MP Matthew Taylor is backing a document making the case for a Cornwall development agency.
He said there was a strong case for a county-based agency which would be accountable to the people of Cornwall.
The South West Regional Development Agency said it was committed to making a prosperous county.
Liberal Democrat Mr Taylor said there was an urgent need for a change in the system in a foreword for a paper by the Cornish Constitutional Convention, Devolution for Prosperity.
The European-funded programme Objective One is due to end in 2006.
By then, an estimated pot of £300m is expected to have been spent.
The Agency helps provide economic leadership and works with Objective One and similar funds for an area stretching from Cornwall to Gloucestershire.
But Mr Taylor said funding applications were often passed between local, regional and government agencies and that a county agency would be the most effective way to ensure that Cornish people and businesses got the support which was needed.
He said: "A Cornish agency would mean an end to interminable government bureaucracy tangling up local Cornish development projects.
"Instead, we would see funds for Cornwall spent by people accountable to Cornwall through an elected body clearly representing Cornwall. There is no more effective way to ensure that Cornish residents and industry get what is really important to them."
The Regional Development Agency said of its work in Cornwall: "The aim of the Objective One European Structural Fund Programme is to regenerate the economy and increase the wealth of Cornwall and the Isles of Scilly."
It said major projects it had funded included the Eden Project and the Combined Universities in Cornwall and that it was also working closely with Camborne, Pool and Redruth Regeneration Company to regenerate the economy and increase the wealth of the county.
The Cornish Constitutional Convention was formed in November 2000 and is leading a campaign for the establishment of a democratically elected and accountable Cornish Regional Assembly.