Ministers have told RDA chairs that they may allow the nine agencies some freedom to move funds between their ring-fenced spending programmes for responsibilities such as inward investment and physical regeneration.
A consultation paper on the RDAs confirms the government is considering the move and sets out a stronger economic development role for the agencies.
Deputy prime minister John Prescott said: 'We are now asking the RDAs to take on a wider role, providing strategic leadership on regional economic development, working to increase prosperity in the regions and seeking a more balanced growth between the regions.'
The agencies have consistently lobbied for more freedom, and the RDA chairs have welcomed the possibility of winning more power over their budgets.
Ministers have turned down previous requests, but Mr Prescott is now thought to have formed an alliance with the chancellor to push through change.
But the paper makes it clear that any extra freedom will be linked to targets
ensuring the agencies meet key government priorities.
It says RDA corporate plans will have to be clearer about how agencies will add value to regions.
The RDA chairs are expected to produce a single response to the paper in the next fortnight.
LGC revealed earlier this month the agencies may also win larger budgets in the spending review (LGC, 16 June). It is understood the government has set aside around£100m extra for the agencies.
Yorkshire Forward chairman Graham Hall said he would be looking for concrete examples of funding increases for both his RDA and the region generally. He said he supported council calls for more education funding.