SENIOR heads of industry have rallied to the defence of regional development agencies, which could be left facing an uncertain future if the Tories win the next election.

It is widely expected in the event of a Tory victory that RDAs will be slimmed down if not abolished altogether under plans to localise funding and powers.

Councils would instead be offered the power to set up smaller local enterprise partnerships to co-ordinate investment over wider areas, but not as large as the Government South West region which stretches from Cornwall to Gloucestershire.

However, senior industry figures have criticised the plans, raising the prospect of a backlash in the run-up to the election.

The British Chamber of Commerce's head of policy Adam Marshall warned against wiping out the tier of regional government.

He told the Financial Times: "There's a need for something to exist between Whitehall… and the local authority level. Localism is something many people believe in but there's a danger in going so local you can't take care of the strategic infrastructure which business thinks is important."

The CBI warned the Tory plans "don't give business sufficient involvement" in key decisions. But business groups in the Westcountry suggested they wanted to see the RDA broken up and refocused on smaller areas.

George Lehunte, chairman of Camborne Chamber of Commerce, said: "Generally, our opinion is it would be a lot nicer to have things locally rather than 'South West'."

He said there should be an "organisation where we have more input".

John Leppard, secretary of Mid Devon Business Association, criticised "huge salaries" paid to RDA staff and the loss of powers to Brussels which had created "a distressing situation" for people who wanted to see more local control.

James Harper, South West RDA head of communications, said: "We have always believed that this debate is not necessarily about 'regions' or 'RDAs', but what is best for future economic development in the South West. Whatever the organisational structure, the ideas and realities of economic development – market and institutional failure, productivity and jobs, sustainable growth and prosperity – remain."

He said there was "strong evidence" that these issues were best tackled "at a level between local and national".

"The next government – of whatever colour – will decide what it wants to do to develop our national economy at all levels," said Mr Harper.

Under proposals in a policy Green Paper earlier this year, the Tories would "strip the regional development agencies of their powers over planning and give local governments the power to establish their own local enterprise partnerships to take over development functions from RDAs".

The Conservatives claim the creation of a regional tier of government has "generated a huge amount of pointless bureaucracy" without securing significant economic benefits.