East Anglian local authorities could be encouraged to join forces to create 'super councils' under Labour plans to take more spending decisions away from Whitehall.

Labour peer Lord Adonis, who will unveil a growth report today which will feature in Labour's manifesto for the next election, also wants to scale back the number of local enterprise partnerships, which currently stands at 39.

While district and county councils will not be forced to become combined authorities, those that do will be given extra power to spend business rates generated by growth in the area.

The combined authorities would follow a model in Greater Manchester, where ten councils have joined forces to become Greater Manchester.

Under Labour plans some £30 billion would be handed down to combined authorities, existing councils and LEPs from Government departments.

Lord Adonis said county-wide combined authorities could take hold in rural areas, adding that Labour wanted to see 'a new generation of really strong civic leaders, who have real power in their city and county regions'.

A series of other proposals, including 25% of all government contracts going to small businesses, will also be included, while recommendations such as creating more technical colleges will be considered.

The New Anglia local enterprise partnership covers Norfolk and Suffolk, Greater Cambridge-Greater Peterborough includes Cambridgeshire and a portion of west Norfolk, while the South East Local Enterprise Partnership covers Essex.

Lord Adonis will say today: 'My overriding aim is to promote a smarter, not a more expensive, state. We need to build on the best of Britain and be optimistic that the best is yet to come.'