The Government is urging council leaders on either side of the Tyne to mend a divide that saw three authorities break away in 2018.
In a letter seen by the Local Democracy Reporting Service, local government minister Simon Clarke said this week that reuniting the area’s seven councils under a single elected mayor was “the only way” to unlock massive public investment in the region’s transport network.
The Tory minister told North of Tyne mayor Jamie Driscoll that he would be “very interested” in holding talks over a new devolution package with council leaders from Newcastle, Northumberland, North Tyneside, South Tyneside, Gateshead, Sunderland, and Durham – and wants to do so by September 24.
The breakdown saw Newcastle, North Tyneside, and Northumberland leave the North East Combined Authority (NECA) to form their own body – for which Mr Driscoll was elected mayor last year.
But the government has now repeatedly stated that the North East will only be given much-coveted powers over its rail and bus services, plus a share in a £4.2billion transport funding pot announced by Chancellor Rishi Sunak in March, if the south of Tyne councils can be brought on board.
Mr Clarke wrote: “We both know the North East needs this new opportunity so badly, and for the benefit of the region we love, we should take it now.
“My firm view is that the optimal basis for Mayoral governance within the North East is the largest possible functional economic area – one that includes all of the seven local authorities currently in the North East Local Enterprise Partnership.
"As well as bringing the potential of greater resources and powers, this optimal geography is the only way to unlock longer term financing over transport, which I know is a priority for you.
“I would be very interested in a discussion with the leaders of all seven local authorities, with a view to moving to an agreement that can unlock this new long term and sustainable investment as quickly as possible.
“My office will be in touch with yours to make the arrangements so that we can meet our aim of having a discussion by September 24.”
Mr Driscoll warned that any devolution deal “will have to work for everyone”, but said it was time to fix decades of under-investment in the North East.
The Labour mayor said: “Government must show it is serious about levelling up in our region. We’re ready to do our part, but they need to get their chequebook out. We’ll explore every avenue available to get the investment we need.
“Any deal we agree will have to work for everyone.
“There’s a lot to be gained. We’ll be pushing for around £600million of transport funding for a start, and then, more for job creation, affordable housing, and funding to support skills.”
Coun Iain Malcolm, NECA chair and leader of South Tyneside Council, said: “South Tyneside Council is always prepared to discuss receiving more powers and access to funding through devolution from central government.
“As NECA chair I can confirm no formal discussions have been held with the North of Tyne on this, but it is important to emphasise that there are a number of devolution structures we can discuss with government at the appropriate time.”
Northumberland County Council leader Peter Jackson was removed from his post this week in a vote of no confidence, with his deputy Glen Sanderson currently in temporary charge before a new leader can be elected.