JOHN Prescott blamed an inflatable white elephant for the death of his dream of an elected North West assembly, as he formally scrapped the planned referendum.

As expected, the deputy Prime Minister announced he was abandoning any hope of holding the postponed poll, in the wake of last week's thumping 'No' vote in the North East.

And he admitted he had been beaten by a huge blow-up white elephant, which was floated across the North East to make the claim an assembly would be a costly talking shop.

In a statement to MPs yesterday, Mr Prescott insisted it was wrong to claim voters had rejected his plans because they were unhappy with the limited powers on offer.

Instead, he said: "I don't think the issue of the powers was the main issue, quite frankly. There were issues about whether people wanted another layer of decision-making.

"That was the question that constantly came up. Does this mean another tier? Does this mean we are going to pay for it? Does it mean more politicians?

"The fact that I could show that it doesn't, didn't really matter. They had come to the conclusion they had and that was it - all summed up in the white elephant."

Mr Prescott faced taunts from the Conservative benches as he said the mandate to hold a North West referendum on the basis of the 2003 "sounding exercise" ran out in May next year.

Conducting a fresh consultation with local people and organisations would create a long and unacceptable "period of uncertainty for local government", he said.

Mr Prescott told MPs: "I will not therefore be bringing forward orders for referendums in either the North West, or Yorkshire and the Humber."

The deputy Prime Minister faced Conservative calls for him to go further by ending unelected regional assemblies and restoring power to local authorities.

But he said it was better, though unsatisfactory, for assemblies made up of indirectly elected councillors to make regional decisions, than to give more muscle to unelected quangos.

He insisted Labour's local government reform plan, with fewer controls on borrowing and extra freedom for the best-performing councils, could help close the North-South economic divide.

But Caroline Spelman, Tory local government spokeswoman, urged Mr Prescott to return "crucial powers over housing, planning and fire and rescue services" to elected local councils.