By Kris Jepson

The £600m North of the Tyne devolution deal pledged in the Autumn Budget by the Chancellor, Philip Hammond, has divided politicians in the North East region.

The deal will provide three local authorities from the North East Combined Authority (NECA), Newcastle City Council, North Tyneside and Northumberland County Council, with £20m a year in extra government funding from 2019 and more devolved powers through an elected Mayor.

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The decision came after the other four NECA councils south of the Tyne, Sunderland, Gateshead, South Tyneside and Durham County Council rejected a devolution deal last year.

The three leaders who struck the devolution deal released a statement welcoming the news.

We are pleased to confirm we have agreed a devolution deal for the North of Tyne with Government. This new, unprecedented devolution of powers and funding offers a once in a lifetime opportunity for the North of Tyne area.

Joint Statement from North of Tyne Council leaders

The Conservative Northumberland politician, Guy Opperman, who represents Hexham, told ITV News he thinks the four councils south of the Tyne have made a mistake by not agreeing to the Government's devolution deal.

I think they have chosen to be left behind because they have chosen to withdraw from the opportunity to be part of devolution. Why on earth would you not want greater power, greater ability to run your own show and a devolved region that is actually providing better jobs growth and prosperity. That's what I wan. That's what we have all supported.

Guy Opperman MP, Conservatives, Hexham

Gateshead Council Leader Martin Gannon claims the money that is being offered is not new money.

Gateshead Council Credit: ITV News

He told ITV News the devolved funds will come from the billions of pounds worth of cuts the Government has made to local government budgets since austerity began in 2010.

We rejected it because it doesn't address the financial imbalance. We were losing £1bn a year and they were proposing to give us £30m between seven authorities. So we want a fair financial settlement, we want a deal which covers the entire region, which gives substantial functions and powers to the region. That's what devolution means.

Cllr Martin Gannon, Leader, Gateshead Council

Business leaders in the region say in the current climate any extra funding is better than no funding at all.

The North East England Chamber of Commerce told ITV News this devolution deal will help the whole region.

I think it's important to get that investment to the region. It's also important that we've got control within the region of how it's spent, so we're not constantly having to go to Central Government to ask permission to do things. We've got the opportunity to see what needs to be delivered in this region to make those decisions really quickly and get that money to where it can have the most impact.

Ross Smith, North East England Chamber of Commerce