Image copyright Reuters

Seven local authorities in the North East of England are beginning talks with the government about having a directly elected mayor for the region.

Chancellor George Osborne is offering councils greater control over local transport, health and housing if they accept a regional figurehead.

Councils in Northumberland, Tyneside, Wearside and County Durham will take part in the talks.

Sunderland City Council said "nothing was off the table" in the negotiations.

In 2004, people in the North East voted "no" in a referendum on whether to set up an elected regional assembly but council leaders are expected to begin talks on the latest proposal within days.

'Entrenched unemployment '

The North East Combined Authority - which represents councils in County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland - has said it will consult with businesses, unions and other groups about the best way to proceed.

The seven councils are all Labour-controlled.

Image caption An elected mayor would be accountable for decisions made across the region

It is part of Mr Osborne's plans to create a so-called Northern Powerhouse to help towns and cities in the North of England compete with those in the South for investment.

Greater Manchester has already signed up to having a directly elected mayor who will oversee policies such as transport, social care and housing as well as police budgets.

Mr Osborne said: "Now we have another major northern area actively interested in our proposed radical devolution of power and an elected mayor.

"We will now work constructively across parties to land a deal. The way our country is governed is changing before our eyes, and much for the better."

Sunderland City Council leader Paul Watson said: 'Nothing is off the table. We have got to see what possibilities there are.

"There is entrenched unemployment here, even though it has gone down. Can we get the powers on skills, jobs and transport to enable us to create a more vibrant economy?"

Asked if people from Sunderland would accept the possibility of a mayor from Newcastle, he said the regional figurehead would be accountable to the "whole region" and that should "get over any possibility of parochialism".