It also recommended that there should be two councils in County Durham, one in Darlington and one for the rest of the county, replacing nine existing councils.
The proposals, which will go out for consultation, are the first to be made for England. The commission, which has the task of unravelling the 1974 local government reorganisation, is reviewing the two-tier structure of county and district councils which has led to confusion and duplication of services.
Cleveland was a largely artificial county created in 1974 and has been bitterly resented by the boroughs, particularly Hartlepool. The commission says that abolishing it will save an average household pounds 46 a year in council tax bills.
But yesterday, Paul Harford, leader of the Labour-controlled county council, said that replacing one authority with four would significantly increase costs, probably by up to pounds 150 a year for the average family.
Sir John Banham, chairman of the commission, promised that if consultation showed that local people were firmly against the proposals, they would be withdrawn. 'We are determined to listen very carefully to local people, whom we regard as the jury. We have seen too much of bureaucrats giving people what they think people ought to want, without going through the formality of asking them,' he said.
'The mistake made in 1974 was to try to change the map of England from London.'
He rejected any suggestion of appeasing governmental political considerations by giving Darlington - where the Tories still have a strong parliamentary hold - its own council, but abolishing Cleveland, which is Labour-held. 'We have not had any discussions with ministers. There is absolutely no pressure that any minister could put on me to say something that the commission did not believe.'
Community identity was one of the strongest reasons for the proposals. Sir John said that in a Mori poll 84 per cent of residents said they identified 'very' or 'fairly strongly' with County Durham, the highest level of community identity in any shire county in England.
In Cleveland there is a lower level of identity to the county council, but relatively strong attachment to the nearest town, particularly by people living in Middlesbrough or Hartlepool. Size, however, is not a factor in the proposals. Darlington, which could have its own council, has a population of just under 100,000. Cleveland, to be abolished, has a population of 550,000.