South Yorkshire councils and chambers of commerce are seeking a judicial review of European Union funding allocations – which could see the county lose £150 million.
Sheffield City Region and Liverpool City Region are unhappy about a decision to strip England’s most deprived areas of more than £650m allocated by Brussels for regeneration projects between 2014 and 2020 and hand the money to Scotland and Wales instead.
South Yorkshire will be hardest hit by the plan – viewed locally as a ‘political move’ ahead of next year’s Scottish referendum – and now faces a 56 per cent cut in the money it receives from the European Union over the next six years.
Sheffield City Region leaders have written to Deputy Prime Minister Nick Clegg urging him to review the policy.
The letter is signed by Sheffield, Rotherham and Barnsley council leaders Julie Dore, Roger Stone and Sir Steve Houghton.
Other signatories are Mayor of Doncaster Ros Jones, the county’s Chambers of Commerce, South Yorkshire Passenger Transport Executive, and James Newman, chairman of the Sheffield City Region Local Enterprise Partnership.
EU funding for South Yorkshire between 2014 and 2020 would be lower than Manchester, Leeds and Cheshire, despite those areas having stronger economies, the letter says.
Mr Clegg said the 2014 allocation of EU funding for South Yorkshire will be higher than this year’s.
But opponents say money granted over the last six years was ‘front loaded’ - so most cash was spent in the first few years.
Richard Wright, executive director of Sheffield Chamber of Commerce, said: “We are being disproportionately affected.”
Mr Clegg said: “This is the fairest possible allocation of EU funding. It is a 15 per cent increase on the 2013 allocation for South Yorkshire.
“The previous Labour Government tapered down EU funds to South Yorkshire between 2007 and 2010.
“Allocations between 2014 and 2020 are a continuation of Labour’s policy.”