The scrapping of regional assemblies has been criticised by the leaders who run the East Midlands version.
The assemblies oversee housing spending in the regions
David Parsons, of the East Midlands Regional Assembly, said handing more planning powers to the development agencies was blatant "centralisation".
Pat Zadora, chairman of the East Midlands Business Forum, said the decision was "amazingly short-sighted."
The East Midlands Assembly, launched in Leicester nine years ago, will be phased out by 2010.
It is an unelected body with members from business, the voluntary sector and local politicians.
Mr Parsons said: "The local people will lose their voice. The regional assembly is an imperfect institution but it was a lot more democratic than the procedures that are now going to put in place."
Their current responsibilities for planning and transport strategy will go to the business-led regional development agencies.
Local Government Minister John Healey said: "The agencies will work closely with local authorities and the first step will be for local authorities to set out a vision for the sustainable development of their area."
The assembly's target of 350,000 new homes for the region will remain, but meeting those targets will switch to East Midlands Development Agency.
Mr Healey told MPs the aim was to "give local authorities and communities greater responsibility and opportunity to boost economic growth in their area."
The assemblies had been seen as precursors for fully elected regional assemblies in England.
But the ballot on setting up the first elected assembly - in the North East in 2004 - saw voters reject it by 78% to 22%.