A new "super-agency" fighting for the North-East is needed to boost growth and provide strong regional leadership, says a new report.
A powerful Regional Executive Agency (REA) should be created from the North-East's existing development agency and a host of other regional bodies to cut through a complex and costly system of government which is holding back the region, it adds.
Whitehall must also hand over more powers and clear lines of accountability established for the new agency, with local council chiefs and regional MPs taking a central role in monitoring its work.
The Government should further consider whether new ministers with regional portfolios are needed before devolving more powers and whether its regional office should be slimmed down with responsibilities transferred to the REA.
The calls for a radical overhaul come in a new report from the influential New Local Government Network think-tank, which says there is "unfinished business" following the rejection of an elected North-East assembly in a referendum in 2004.
Think-tank director and report author Chris Leslie insisted the devolution of power would be a positive step for the region.
He said: "The successful regional co-ordination of public policy can make a major impact on the conditions for growth, so it is right that the debate about the future of regional governance in England continues to evolve.
"We recognise the Government has determinedly devolved powers to the regional development agencies (RDAs) who have worked well and made great strides in securing investment for skills, transport priorities and industrial innovation, but we also recognise there are constraints which remain to be tackled."
Mr Leslie, a former Labour minister, added: "In many regions, the leadership of the regional development agencies could be built upon through enhancing their role and functions, perhaps creating a single RDA-plus style regional executive agency which draws together more of the currently disparate regional activities spread across several separate bodies at present."
He also suggested transferring functions from the Government Office to the new agency and that the upcoming comprehensive spending review - which will set priorities for coming years - should consider if work led by Whitehall departmental "outposts" could be better led if integrated into a REA.
The latest calls for reform come after the Organisation for Economic Co-operation and Development (OECD) last year published a report which concluded current Government arrangements are a mess.
Experts found there were too many competing strategies and bodies with no single agency to co-ordinate them and no one with sufficient weight to put a powerful case to central government.
It highlighted that decision-making and direction needed to drive the economy is not there and the OECD suggested a powerful elected mayor to govern the Newcastle city region - taking in Tyne and Wear, south Northumberland and north Durham.
But the suggestion that a new super-agency be created was slammed by anti-Assembly campaigner Neil Herron yesterday. He insisted another move to devolve power would be a further waste of public money.
He said: "How many times do the people of the North-East have to shout very, very loudly `no'?
"We have never asked for it, and we've never wanted it. We don't need our money wasted yet again."
Mr Herron added: "We have 30 representatives in Westminster for the North-East. If we need strong leadership, they should be stepping up a gear.
"They should be banging the drum for the region very loudly."
While striving for more power for the North-East, Mr Herron insisted any move to create a new super-agency would be a waste of money and put power in the hands of people who were not publicly accountable.
