A political row is raging in the South East over Labour's plans to replace county councils with powerful regional assemblies.

When John Prescott promised a series of directly-elected mini-parliaments he said devolution to the regions would lead to the rebirth of political life in England.

To make way for his "political dream", the old county councils would have to bite the dust.

The old administrative divisions of England, which in some cases can be traced back to Saxon times, would be swept aside - something 54 per cent of voters would not be worried about, according to a BBC opinion poll.

The further you travel from London, and the closer you get to Edinburgh and Cardiff, the more popular English devolution becomes.

In the North-East, the North-West and the West Midlands, more than 70 per cent of voters support having an assembly, according to the poll.

In the South-West, support runs at 61 per cent. Only the South-East is opposed, where fewer than half of voters want their own mini-parliament.

It is here the Conservatives, keen to hold on to their traditional power base in the southern shires, have begun to smell a rat.

Prior to any referenda on devolution, new formulas for government funding are being introduced to local authorities.

In the North and the Midlands, where support for devolution is strongest, councils stand to benefit from the proposed changes.

Typically, those councils stand to see the amount of support they get from Westminster increase by one to two per cent, according to figures compiled by the Tory-dominated County Council Network.

In the South-East, however, there is expected to be a drop in the amount of government cash help of almost four per cent, a shortfall mostly directed at the shire counties.

Almost all the region's county councils, responsible for education, social services and roads, are at the top of the list of local authorities likely to lose out because of the revised formula.

In East Sussex, which is already one of the poorest counties in England, the county council fears it could lose as much as £44 million in cash support - ten per cent of its annual budget.

The actual loss, once the new formula is worked out, is more likely to be closer to £20 million, still enough to send shivers through the already cash-strapped authority.

Deputy leader Daphne Bagshawe said if services were suffering as a consequence of councils being starved of cash, sceptical voters might be tempted to think more favourably about a regional assembly at a referendum.

She said: "If you want to accelerate regionalism, and you want to take away the shire counties, that would be a way of doing it. That would be the outcome if this is not stopped.

"I believe the people of England value their counties and their counties are under great threat.

"People actually understand their counties - they are the old historic divisions of the country and it has proved its worth as a structure.

"If you say to somebody you live in the South-East Region, what does that mean?"

After a referendum, assemblies will be created in regions where voters backed them.

Regions that do not want an assembly will stick with the present system, although existing regional authorities would be given enhanced powers.

The inconsistency over creating assemblies has led to fears that areas where voters do not embrace devolution will lose out to assembly-led regions.

Among the powers of the new bodies would be economic development, regional planning, including house building, transport and waste and responsibilities such as promoting health, culture and tourism.

Many of their powers would not be too far removed from those already in the hands of the county councils.

Lurking behind the arguments about regional government is that old Tory bugbear, Europe.

Brussels is happier dealing with regions than it is with a complicated set of counties whose boundaries defy bureaucratic map-marking.

Ken Bodfish, Labour leader of Brighton and Hove City Council, is at the forefront of the drive towards regional government as vice-president of the EU's Committee of the Regions.

He has little truck with county council claims that the Government is out to get them.

He said: "This is conspiracy theory gone mad and it is party political scare tactics by the Conservative-controlled County Council Network.

"The county councils are using every excuse to fight regionalism but in my view they are fighting a losing battle."

He said the old counties were out of date as administrative units and in most cases too remote from voters to garner any real affection.

Regional assemblies would be able to operate strategically, planning new airports, roads and homes, with an eye to the needs of entire regions.

He said: "There should be tiers of government, European government, national government, regional government and local government.

"Bring government close to the people - that is what we have got to try to do."