HELP for struggling Devon businesses, regeneration and netting vital European funding would be threatened by further cash cutbacks, it is warned.

The issue of additional spending cuts and their impact, as a result of the post-recession squeeze on public finances, has been raised by regional regeneration chiefs with MPs.

The South West Regional Development Agency (RDA), tasked with boosting the economy of Devon and wider region, has already had its capital coffers raided by the Government to the tune of £26m, leading to projects having to be ditched or scaled back.

On top of these cash cutbacks, the RDA has also seen its income plummet from land sales because of the recession.

And now it has warned of the threat to its revenue budgets as a future government, whichever party wins the election, seeks to balance the nation's books which are currently in the red.

Members of the Commons South West Committee heard that this would impact on RDA investment in business support and Urban Regeneration Companies, and also raise a big question regarding the ability to secure European cash that require match-funding.

This comes as private sector cash is drying up because of the economic downturn, placing increased emphasis on public money to draw down money from Brussels.