Despite much speculation that the nine RDAs – including Yorkshire Forward – would be axed in a cull of quangos if David Cameron were to win the next election, the Tories will instead strip them of powers and allow them to continue as organisations focused on business and economic development.

The RDAs, which jointly spend more than £2bn a year, have come under fire from critics – including business leaders at a House of Commons committee earlier this week – who question how well the money has been spent, although northern agencies including Yorkshire Forward are generally credited with being more effective.

But in an interview with the Yorkshire Post, shadow business secretary Alan Duncan said the agencies – which are about to get more powers over planning and transport under the Government's move to abolish regional assemblies – would not be scrapped, although they will be relieved of some responsibilities and in some areas they could be restructured.

"We think the Government have polluted RDAs, they've basically diluted all their original business purpose and they've just made them an executive arm of Government, largely for planning," said Mr Duncan. "This isn't what RDAs are all about. They're not there to decide where to put 50,000 houses, they should be there to develop the economic fortunes of an area.

"Regional policy is in a mess under Labour. Regional assemblies have collapsed and regional development has been taken over by planning purposes.

"We'll take out the planning element and give it back to councils at the county layer. And if councils want to join together to push for more regional projects that's fine.

"RDAs will remain but with a business-led enterprise purpose. And what we're going to let them do is propose what shape they want to take. If they want to stay as a big regional RDA they can come to my department and say. If they want to be smaller so they work more closely with county councils for specific regions they can do that."

Yorkshire Forward – with budget of £352m – prides itself on being the "leanest" RDA, and says during 2006/2007 it created and safeguarded 22,254 jobs, helped 1,067 businesses to start up and attracted £213.3m of regeneration investment.

It is also co-ordinating the efforts to save thousands of jobs in the region under threat from the planned merger of HBOS with Lloyds TSB, the nationalisation of Bradford & Bingley and other economic turmoil.

But the Tories have made no secret of their scepticism about RDAs – set up by Labour – and have questioned whether the creation of jobs and expansion of economies would have happened anyway without them.

Speculation that RDAs would be ditched was fuelled at the Tory conference in Birmingham last month, when shadow local government secretary Eric Pickles said a long list of quangos would be scrapped under Labour and said: "The best thing I can say about RDAs is that they haven't done much harm". He also likened a restructuring of quangos to a "restructuring" of Anne Boleyn.

But Mr Duncan – who last year challenged RDAs to prove their worth – said a Green Paper outlining Tory policy on localism to be published in the coming weeks would instead propose a role for revamped RDAs which would be "focused and flexible".

He added: "You've got to concentrate on the areas of economic need."