The Government has confirmed that SEEDA, the South East England Development Agency, is to be swept away and replaced by a "local enterprise partnership".

In a radical shakeup of regional funding, the Coalition Government has, as widely expected, pulled the plug on the agency.

Ministers have invited councils and business leaders to submit proposals for the new partnerships (LEP) by September 6.

It said they would "provide strategic leadership in their local areas and create the right environment for business success and economic growth".

LEPs will take over many of the roles handled by SEEDA, including planning and housing, local transport and infrastructure, employment, enterprise and supporting business start-ups.

But some activities - inward investment, sector leadership, business support, innovation and access to finance - will be led nationally.

Business Secretary Vince Cable said: "We are determined to rebalance the economy towards the private sector, so it's important we create a more effective structure to drive economic growth and development across the country."

Eric Pickles, the Communities Secretary said: "If you want to rebuild a fragile national economy you don't strangle business with red tape and let bloated regional quangos make all the decisions."

He added: "The solution needs to be local - we know that when councils and local business work hand in hand they can drive economic growth together and places can be transformed."

The Government also unveiled a £1bn regional growth fund to help areas and communities likely to be badly affected by spending cuts.

Guildford-based SEEDA, which has offices in The Observatory, Chatham Maritime, had already been told its £108m budget was being slashed by £24m.

Financial help for regeneration projects in the Thames Gateway, including Medway and Kent Thameside, is certain to be cut, perhaps by as much as a third.