Grayling argued that, while improving northern transport links was one of his "biggest priorities", they must be "designed and managed by the North itself".
Writing in The Yorkshire Post this morning, he said: "It is central government's responsibility to provide funding and a delivery structure that ensures efficiency, value for money and accountability.
"But, beyond this, I want the North to take control."
His comments have drawn much criticism with RMT union officials stating it was 'a disgraceful way to treat a region'.
Political and business officials are meeting in Leeds today for a transport summit to discuss the poor state of networks across the north.
Greater Manchester Mayor Andy Burnham has already stated how 'the patience of people in the North of England has run out' and now The Yorkshire Party has added their voice.
Yorkshire Party leader Mr Arnold said he was confused by Grayling's comments and called for the Government to hand over more powers to the county.
"The Yorkshire Party is pleased the issue of investment in transport infrastructure is getting such a good airing at the moment," he said. "However we are somewhat confused by Chris Grayling's comments in The Yorkshire Post today. He talks about the North 'taking control' of its transport. As we know responsibility only really comes with control of the budget. This is something Chris Grayling and his Government is unwilling to give to Yorkshire.
"The other point here is that it's not just transport infrastructure where there is an imbalance in spending and therefore performance between London and the North. This is true of spending on education and the arts, for example, where Yorkshire is left behind.
"Until the Government gives Yorkshire the ability to run its own affairs (within the UK) we remain sceptical that very much will change."
RMT General Secretary Mick Cash said: "The Tory Northern transport shambles continues today with Chris Grayling now wading in to local civic leaders just 24 hours after his former colleague George Osborne targeted his fire on his own side.
"This is a disgraceful way to treat a region that has just had key rail upgrade and modification works binned and which has been condemned by this minority government to life in the slow lane.
"The so-called transport summit today is a total fraud that has no involvement from the workforce who are out their day in day out struggling to hold services together. Meanwhile both Merseyrail and Northern Rail press ahead with plans to axe guards and reduce their trains to a dangerous, inaccessible shell that will be a magnet for violent and anti-social behaviour.
"Any Labour politician that goes along with this divide and rule nonsense from the Tories should be called to account and RMT will be stepping up the campaign for safe and accessible rail for all under public ownership."