Plans for a regional assembly for Yorkshire could increase costs while offering no real benefits to firms in the region, Bradford's business leaders warned today.

The Bradford Chamber of Commerce is leading calls for deputy Prime Minister John Prescott to abandon a planned referendum on the assembly, which was announced on Monday.

Sandy Needham, chief executive of the chamber, said: "We really cannot see what improvements it is going to bring. There is already representation beyond the local area with the Government's local offices and the regeneration agencies. What is another layer of bureaucracy going to add? How will Yorkshire benefit? There is no suggestion we will get more money than other regions."

She said there were fears the assembly could be funded through cutting local authority budgets and she called for the project to be fully costed.

Businessman John Pennington said he believed an assembly could only work if it was replacing a tier of Government rather than creating an extra one.

He said: "I fear it will be the same people who are governing us now who will just sit on another body. It is more jobs for the boys. Its success will depend on what powers it has, but businesses cannot afford any more financial burdens."

Rashid Awan, president of the Pakistan Society of West Yorkshire and patron of the Bradford Asian Business Association, welcomed the referendum announcement.

He said: "I think it is quite a progressive step.

"But the main thing will be the powers of the assembly, how it will work and who it will be accountable to. The answers to these questions are not yet clear."

Curry restauranteur Omar Khan said an elected mayor in the city would provide greater leadership than the planned assembly.

But Denis Kaye, deputy chairman of the Institute of Directors in Yorkshire, rejected the suggestion a new assembly would mean more decisions being made in the region, claiming an assembly would mean more "pen-pushing, statistic-churning bureaucrats"