The North West Development Agency has backtracked on claims that it had decided which schemes would face cuts after a reassessment of its budget.
But it denied that it also admitted that it had allocated £200m more than its £400m budget at a private meeting with the North-west Regional Assembly.

A source at the meeting this Tuesday said: "The agency is yet to work out the final range of projects to receive funding.

"[NWDA chief executive] Steve Broomhead sought to reassure us about its priorities, but we still have grave concerns about its ability to fund schemes and to bring in European money."

An NWDA spokeswoman said: "Discussions are ongoing with local strategic partnerships right now about which are the priority schemes in each area. There is nothing unusual about this."

But she admitted that the NWDA had over-programmed as much as £100m, but said this was an entirely normal procedure.

The regional assembly is monitoring the NWDA closely, with further meetings scheduled for April and June, and a summit planned for September.

Councillor Terry Waiting, leader of Barrow Borough Council – one of the councils waiting to find out its allocation from the NWDA – said: "We were promised £40m for a taskforce, partly to look at our housing problems.

"To do this is unthinkable. It's a cut in funding, plain and simple."