Regional assemblies, which oversee the spending of tens of million pounds on housing, transport and planning, are to be scrapped, the government has said.
The assemblies oversee housing spending in the regions
The eight assemblies in England are made up of councillors who are nominated to sit on them.
From 2010, their role will be transferred to the business-led regional development agencies, which will have an enhanced role.
Councils could also get the power to levy business rates again.
Local Government Minister John Healey told MPs the aim was to "give local authorities and communities greater responsibility and opportunity to boost economic growth in their area.
They would also "bring consultation and planning for jobs, homes, investment and the environment closer together".
Mr Healey added that ministers would "strengthen public scrutiny and accountability of regional plans and the work of RDAs".
To Tory laughter, he said plans reflected the prime minister's "vision of a modern democracy in which power is exercised at the lowest level and those with power are held more clearly to account".
The main proposals were to:
- Consult on creating a statutory economic duty for councils
- Consider options for supplementary business rates, working closely with business and local government
- Require RDAs to delegate funding to local authorities and sub-regions wherever possible
- Move funding for most 14 to 19-year-olds' education and skills to local authorities from the Learning and Skills Council
Mr Healey also said: "Regional assemblies, in their current form, will no longer exist."
But shadow communities secretary Eric Pickles said the assemblies had been the "apple in the eye" of former deputy prime minister John Prescott and had now been reduced to "rubble".
The assemblies had been seen as precursors for fully elected regional assemblies in England.
But the ballot on setting up the first one - in the North East in 2004 - saw voters reject it by 78% to 22%.