The overwhelming vote against an elected regional assembly in the North-east may have set back the cause of English devolution by 20 years, ministers believe.
The Government was stunned by the scale of the defeat - by 78 per cent to 22 per cent. The verdict of voters in a region traditionally loyal to Labour was a humiliating rebuff to John Prescott, who has championed the concept of English "mini-parliaments" for years. Last night the anti-assembly campaign called for the Deputy Prime Minister to resign over the defeat.
Although ministers insisted referendums could still be staged elsewhere, they conceded that the North-east result had killed off the initiative for the foreseeable future. One said: "We can't risk going through this again. It's hard to see how we can return to this within a decade, or even two."
Nick Raynsford, the Local Government minister, hinted at a similar timescale yesterday by citing the example of Welsh devolution. He told BBC Radio 4: "At the first attempt in Wales in 1979, people voted 'no' and that was 80 per cent against. When the second offer was made in 1997-98, a very different result was seen."
Mr Prescott has been a long-standing advocate of elected assemblies, but not all his cabinet colleagues have been so enthusiastic. He is angry they did not do more to champion devolution to the North-east, but some ministers believe he pursued it too doggedly.
The referendum produced a vote of 696,519 to 197,310 against the proposal on a turnout of 48.4 per cent. Ministers were braced for defeat after the "yes" campaign failed to catch fire, but the size of the margin staggered them. All the region's 23 council areas - including Sedgefield, represented by Tony Blair, and the Darlington constituency of Alan Milburn - produced a clear "no" vote.
Labour and the Liberal Democrats joined forces with business leaders and local celebrities to push for a "yes" vote, but their campaign failed to take off. All the running was made by opponents of the assembly, backed by the Tories and the UK Independence Party, who adopted a giant inflatable white elephant as their campaign symbol.
Speaking after the result, Mr Prescott, who was clearly disconsolate, acknowledged the result was "emphatic". He said: "It was an overwhelming defeat for the proposal put before the North-east public. As a government we believe in letting the people have their say."
Neil Heron, of the "no" campaign, said: "We did not expect anything other than an absolute landslide. We expect, after spending more than £10m of public money on this fruitless exercise, Mr Prescott will now consider his position."
Proposed referendums for establishing assemblies in the North-west and Yorkshire and the Humber have already been postponed. They now look certain to be cancelled.
The outcome carries a warning for ministers, as they plan a vote on the European constitution for spring 2006, that such a poll can easily become a referendum on the Government's popularity.
A Tory frontbencher said: "Labour's agenda on constitutional reform and Europe has now been shattered. They thought that all they had to do was to get the Prime Minister to smile and wave at the crowds. It didn't work in the North-east and it won't work on Europe."
A Downing Street spokeswoman said: "The Government wanted to give the choice to the people of the North-east. They have made their decision and we respect that."
Michael Howard, the Tory leader, said he was "delighted" that the people of the North-east had "seen through the Government's plans for a very expensive talking shop".
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