A new National Growth Council would draw up the long-term national plan with “concrete commitments” so it could be held to account, argues the former deputy prime minister.

Last March the Government asked Lord Heseltine to look at ways of boosting economic growth. But his report, published today, will make difficult reading for the Government.

The Conservative peer criticises the Government for a lack of airport strategy and also calls for radical plans to devolve power and budgets to the regions.

He wants to see a single fund of some £49bn, pooled from existing Whitehall budgets, for projects such as housing, skills training and infrastructure.

The mega fund would be made available for regions to bid for through their fledgling Local Enterprise Partnerships, and then spent on agreed local economic plans.

The report, entitled “No Stone Unturned in Pursuit of Growth”, also urges chancellor George Osborne to do more to boost infrastructure spending.

Among 89 recommendations he also calls for a powerful development corporation for the Thames Gateway and calls for district councils to be replaced by unitary authorities.

His proposals were welcomed by civil engineers who have argued for the implementation of a local infrastructure funding model, and for Local Enterprise Partnerships to focus more on the delivery of infrastructure to boost growth.

Civil Engineering Contractors Association director of external affairs Alasdair Reisner said: “CECA has been working with government and others in recent months to try to unlock projects at a local level around the country.

“Heseltine’s recommendations seem to support this work, fostering an environment where local communities will be better able to deliver the priorities for their area.

“But local bodies must step up to match the increasing responsibility that they may be given. We cannot create a situation where councils and Local Enterprise Partnerships develop economic strategies that are mere wish lists of activities that they do not have the capability to deliver.”