Yorkshire Forward ordered to make £40m budget cuts (VIDEO)

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The quango had been ordered to identify 44m cuts, but was spared the full pain as Ministers said southern regions would bear the brunt of savings.

Among the 100 projects now set to be hit – either by delays, scaling down or cancellation – are flagship schemes such as Tower Works in Leeds, Bradford City Park, the Spa redevelopment in Scarborough and the 1bn York Central transformation scheme.

After the Cabinet met at Bradford's Grattan Stadium yesterday – gathering outside London for the first time since the coalition Government was formed – the Prime Minister defended his plans to boost Yorkshire's private sector as Labour and businesses accused him of "slashing" investment.

The meeting focused on how to expand regional economies amid concern at the over-reliance on financial services and the City before the economic crisis, and two Yorkshire businessmen were invited to address Ministers.

Mr Cameron denied that a Regional Growth Fund – worth 1bn over two years – was a smokescreen for the scrapping of billions of pounds more funding for regions and ordered more action to get banks lending to small businesses again.

Although he stressed that spending had to be cut, he promised there would be other funding available for local enterprise partnerships, which are to be set up instead of the regional development agencies.

Mr Cameron was later quizzed by Yorkshire Post readers at Leeds Trinity University College and Ministers spread out across the region on a string of visits.

But last night the reality of the public spending squeeze was brought home as news of the Yorkshire Forward cuts emerged – part of the 6.2bn savings ordered across Government by the Chancellor this year.

Business Secretary Vince Cable had promised to give "preferential treatment" to agencies in four regions more dependent on the public sector, including Yorkshire Forward, but only 4m of spending was reprieved.

Yorkshire Forward chief executive Thea Stein said one project had been spared – the broadband scheme Digital Region – while Welcome to Yorkshire would have to make one rather than two cuts to its budget.

She said: "There were two cuts, one to Digital Region and an additional cut to Welcome to Yorkshire, which we said we could make but would be particularly difficult.

"It is important to remember that not all of the proposals we put forward were straight cuts, some were deferments and going forward we need to look at the budget to understand the full phasing of the deferments."

Downing Street sources also suggested that the costs of yesterday's Cabinet event would be significantly cheaper than the 200,000 bill when Labour came to Leeds.