Differences of opinion on what should replace the South West Regional Development Agency (RDA) has put the Westcountry business community at loggerheads with local authorities.

Yesterday marked the deadline for submissions on possible make-ups for Local Enterprise Partnerships (LEPs), which will take over the RDA's responsibilities after the coalition government decided to abolish them.

The Department for Business, Innovation and Skills invited suggestions from business interests and "top tier" local authorities – unitary or county councils.

Cornwall has grouped in with the Isles of Scilly, while Devon County Council has submitted a bid with Plymouth and Torbay councils.

The decisions have disappointed those who called for a region-wide LEP, to create a stronger lobbying voice and business leaders feel they have been protesting that councils did not properly consult.

Cornwall has come in for criticism for deciding to "go it alone" with the Isles of Scilly, effectively scuppering any region-wide bid.

Yesterday, the Devon and Cornwall Business Council agreed to back whichever bid best encompassed its objectives, including developing skills, enabling finance, improving infrastructure and supporting small and key businesses. Chairman Tim Jones warned that none of the ideas on the table so far seemed to meet the criteria.

He said: "There are certainly gaps between what the business community wants and what local authorities are looking to deliver."

In Somerset, the Chamber of Commerce has put forward an alternative plan, which would encompass Devon, which it claims is backed by the business community in both counties, as well as Somerset's councils. Rupert Cox, the Chamber's chief executive, said: "Councils have reverted to type. They have gone for old, established alliances rather than economic drivers. That's a really big issue."

But William Mumford, Devon County Council's cabinet member for strategic partnerships, said the authorities had acted quickly because of a tight Government- imposed timeline. He stressed that the submissions were the start of the process, and consultation would follow.

Nigel Hutchings, chief executive of South West Chambers of Commerce, said councils had been too keen to group together within their own boundaries. He said work with the RDA had gained an "awful lot of ground" on transport, development and infrastructure issues.

Tom Flanagan, Cornwall Council's director for the environment, planning and economy, insisted consultation had taken place, and the bid was supported by the Cornwall Chamber of Commerce and the Federation of Small Businesses in Cornwall.