Plans to create a peninsula-wide body to boost the economic prospects of the Westcountry have been virtually killed off by resistance in Cornwall.

The Western Morning News understands a statement is soon expected on the economic relationship between Devon and Cornwall as the deadline nears for alternative plans to the sprawling South West Regional Development Agency (RDA), which is soon to be abolished.

But a formal "Devonwall" partnership, championed so the region can punch its weight when bidding for Whitehall funding, has been largely rejected in Cornwall.

Details of Cornwall Council's intentions have emerged after a motion in support of the formation of a local enterprise partnership (LEP) representing the county was unanimously passed by councillors.

Sandra Rothwell, head of economic development of Cornwall Council, who is assembling the local authority's bid, indicated that a "bespoke" body for Cornwall, and possibly the Isles of Scilly, was the favoured option.

But she added the county would work with the rest of the Westcountry "where it is appropriate", hinting at a memorandum of understanding across the region.

She said: "We are still working through what that (an LEP) might look like, such as potentially a private sector chair. But there is a strong case for a bespoke body. However, it is agreed we will work with our peninsula partners, particularly on lobbying for transport and connectivity. There will be conversations with Plymouth and Devon."

LEP applications have to be submitted to the Department of Business, Innovation and Skills by September 6.

Unlike RDAs, where regions are allocated hundreds of millions of pounds, enterprise partnerships across the country will fight each other for money from a central government pot.

The case for a standalone economic body is strengthened by Cornwall qualifying for European Union subsidy and last year moving to unitary authority status.

Yet the formation of an LEP for Cornwall could yet run into controversy over fears that there is a reluctance to forge relationships with business.

George Eustice, Conservative MP for Camborne and Redruth, has set up a commission to ensure the voice of business is heard, arguing that the coalition Government is demanding partnerships are led by the business community.

His commission has secured the backing of senior directors of some of the country's biggest companies – all with connections to Cornwall – so industry can "call the shots".

Peter Clarke, founder of bed manufacturer Silentnight, and ex-CBI chief Sir John Banham are supporting the commission, Mr Eustice says.

Bob Pepper of timber company Frame UK, David Brewer of laundry firm Brewer and Bunney and Philip Kelly of Kelly's Ice Cream are also involved.

Mr Eustice said: "Too often in the past, economic development has just been run by the public sector through the RDAs.

"When it comes to the new LEP, Cornish business must be in the driver's seat and will increasingly call the shots."

Councils in Devon had been working up plans to form a "peninsula-based" Devon and Cornwall LEP, and last night expressed disappointment that Cornwall appeared to be going alone. Devon County Council's cabinet member for economic regeneration and strategic planning Councillor William Mumford said: "Devon and Cornwall are going to have to fight for funding and we're going to be up against very big regional LEPs, particularly in the north ."

Businesses have become increasingly frustrated with the troubled Cornwall Development Company, an arm of Cornwall Council, and fear the same could be repeated with an LEP.

Two people have been offered its chief executive role before knocking it back.

Alex Folkes, Liberal Democrat councillor for Launceston Central, who tabled the council motion, said a Cornwall LEP would not be "isolationist". He argues a Westcountry-wide LEP would be torn between loyalties to Devon and Cornwall.