Resignations London Governance report

A furious row has broken out over plans to change the way London is run.

A panel set up to find ways of improving governance in the capital was hit by high-profile resignations minutes after it published a controversial interim report.

In the report, the Commission on London Governance, a cross-party body of councillors and London Assembly members, condemned the "secret state" of unaccountable quangos that spend millions each year.

It called for a series of changes, such as allowing borough councils to retain business rates - rather than having to pass them to central government - restructuring the NHS in London and scaling down the Whitehall department responsible-for the capital. It said local councillors should be given more power and become "local champions".

But this sparked the resignations of two members, who claimed the recommendations did not have allparty support and would erode the traditional role of " democraticallyelected councillors" in London's 33 boroughs.

Brian Coleman, the Conservative vice-chairman of the London Assembly, resigned saying the report had not been agreed with commission members. He said he was opposed to councils retaining business rates as it meant controls on "loony Left" spending introduced by Margaret Thatcher in the 1980s were at risk. He said: "I'm furious. The report has been bounced through."

Damian Hockney, Veritas leader on the London Assembly, also quit. He said: "We are splenetic with anger with what has happened."

It was the latest crisis to hit the commission, which was conducting the first review in 20 years. It was set up to consider merging the 33 boroughs into five "super boroughs" but the range of its inquiry was scaled back when the Conservatives became the biggest City Hall party.

The report suggests giving Londoners a greater say over health, education and police and says that "too many" decisions about where funds are allocated are taken "by central Government and its unelected quangos".