John Prescott effectively scrapped his bid for regional assembly government yesterday when he cancelled planned referendums in the North West and Yorkshire following last week's decisive "no" vote in the North East poll.

Liberal Democrat spokesman Ed Davey warned of a growing "democratic deficit" and called for strategic planning powers to be returned to county councils.

Conservatives said the deputy prime minister was "history" and called on him to apologise for the £10 million referendum.

Meanwhile Prescott has signalled that the number of new homes to be built in the South East may rise from 590,000 to 720,000.