REGIONAL Assembly chiefs today denied they had misused money to campaign in favour of a directly elected North West parliament.

And they accused Lancashire County Council, which made the accusation as it announced it was pulling out of the North West Regional Assembly, of being 'political' with its claims.

They hit out after county council leader Hazel Harding attacked the motives of the Regional Assembly -- which is currently non-elected and made up of local authorities which come together to campaign on regional issues.

She said it had been deliberately campaigning in favour of the referendum on elected regional government and for a 'yes' vote in that referendum.

She said the county council had sought legal advice on the issue and had been told it breaches the Secretary of State's code of conduct for councils because it effectively meant public money was being used to try and persuade opinion on policy,

Lancashire County Council will now ask for a refund of its annual subscriptions of about £27,000.

Coun Azhar Ali, chairman of the NWRA and leader of Pendle Council said: "This announcement by Lancashire County Council follows their defeat on this issue at the recent Labour Party Regional Conference in Southport.

"Throughout the Government's soundings exercise the Regional Assembly has acted to raise awareness among regional partners, stakeholders and, importantly, members of the public, of the need for a referendum on the devolution issue.

"The Assembly is confident that it's own legal opinion on the manner in which it has set about raising public awareness is absolutely in line with the criteria laid down by the Government.

"Clearly Lancashire County Council's actions relate to concerns over a review of local government which the Government announced last year in its original White Paper.

"This has been interpreted as a precursor to the demise of the three shire counties. At no time has the NWRA called for the abolition of county councils and has always taken the view that regional government could operate alongside the existing local authority structure."

A report presented to Lancashire County Council's cabinet used an archive of press releases stored on the NWRA's website to prove the organisation had been pushing for a referendum.

Coun Harding said: "This is not political and it is something I take no pleasure in, but we believe, on legal advice, that rules have been broken and we cannot continue to fund an organisation which is acting in this way."