BUSINESS Secretary Vince Cable has fuelled fears that regeneration schemes in Exeter and the wider Devon area could bear the brunt of budget cuts.

The Lib-Dem Cabinet minister has again insisted that slashing spending of bodies tasked with boosting regional economies will be more acutely felt in the south of the country.

His comments will reinforce concern about plans to 'protect' three northern regional development agencies and the West Midlands agency from £270 million cuts announced last week.

It means the in-year savings are likely to fall more heavily on the remaining bodies, including the South West Regional Development Agency, sparking warnings of 'carnage'. Even if the cuts were shared evenly, the agency was already set to be hit hard with its £120 million budget slashed by £23 million.

Mr Cable had already said there was a stronger argument for investment in regional economies in the north and West Midlands than in the rest of the country.

He has now restated this view, saying: "There will be cuts and that's for sure. But the cuts are concentrated in those parts of the country where they are least needed."

There are fears that the South West RDA's share of the cuts burden could rocket to more than £80 million, leading to vital projects being ditched.

The RDA had previously pledged funding for infrastructure improvements to allow developments near Exeter Airport to progress, including the Skypark industrial estate, and a high-tech science park for the city.

It comes as Deputy Prime Minister Nick Clegg said special help would be targeted at areas hit by cuts, naming only the North East, North West, South Yorkshire and London.

A letter from South West RDA chief executive Jane Henderson to business and political leaders refers to the threat posed by 'protecting' budgets in certain parts of the country.

It states: "We know that ministers are considering the desirability of re-balancing spend across the regions, and the eventual figure for the South West could potentially be greater.

"There is bound to be some impact on the businesses and communities with whom we work. Nor can we completely rule out looking to delay or scale back some projects to which we are already committed."

A spokeswoman for the RDA in Exeter said: "All projects the RDA is involved in are under review because of the current funding situation."