A public spending watchdog has attacked as 'scandalous' the progress of the Government's flagship economic growth programme in releasing only £60m of the £1.4bn cash pot allocated to boost local economies.

Reporting on the Regional Growth Fund (RGF), which launched in June 2010, MPs from the Public Accounts Committee (PAC) found £364m has been withheld by intermediaries such as local authorities and banks through endowments - and a further £57m funding is parked with other bodies.