The deputy prime minister is one of the winners in the new session of parliament.

John Prescott has waited five years to pioneer regional devolution and has now been given the green light.

His department will also guide a planning bill through parliament.

Prescott, often seen as a loser in previous Queen's Speeches, now gets the chance to push through two measures closest to his heart.

Bills have now been drafted to enable referendums on creating regional assemblies and on modernising local government.

The Regional Assemblies (Preparations) Bill will pave the way for the creation of directly elected local assemblies in those areas that want them.

Building on the regional governance white paper, published in May, it will set out the question to be asked and explain who will be eligible to vote in any regional referendums.

The bill will also set out the conditions to be met before the government allows a regional referendum to be held.

It will also provide powers for the government to pay grants to regional chambers for their work as regional planning bodies.

The bill was warmly welcomed by Louise Ellman, a Liverpool Labour MP, who described the plans as "milestone on the path to decentralisation".

"The English regions will now have their opportunity," she said. "Devolution is as important to regions like the north west as it is to Scotland and Wales," she said.

"I have campaigned for this day for many years. It is now important to win the hearts and minds of the public."

The Office of the Deputy Prime Minister promises that the Local Government Bill will cut red tape for all councils and give additional responsibilities to the top performing authorities.

All councils will be allowed to borrow capital for investment within "prudent limits".

The bill will also try to improve relations between councils and local businesses by providing rate relief for small businesses and introducing new Business Improvement Districts.

Greater discretion will be given to councils in setting council tax bands and exemptions.

Sir Jeremy Beecham, chairman of the Local Government Association, said plans to give councils more freedom were "the way forward".

"This bill signals a relaxation of central control over local affairs. Many of the proposals are an essential first step if the government is to travel the road towards freedom and flexibility for local councils," he said.

"There is still a Whitehall knows best ethos that we need to confront if local government is to be freed up to properly represent local people and meet their needs."