Midlands MPs have expressed anger over the announcement that funding for more than 100 regeneration schemes is to be axed.

Richard Burden (Lab Northfield), the Birmingham MP leading an inquiry into the effects of the recession on the West Midlands, said he was “very worried” about the plans. And Caroline Spelman (Con Meriden), the Shadow Local Government Secretary, said the region needed regeneration more than ever, because of the economic downturn.

It follows an announcement by Advantage West Midlands (AWM), the regional development agency, that it has withdrawn funding for 122 regeneration schemes across the region.

The agency has been forced to cut funding for projects partly because its own funding from central government has been reduced by £48 million. It also expects to see profits it makes from its own land and property receipts drop by £21 million.

Business Secretary Lord Mandelson has told it to focus the cash it has left on schemes to help industry get through the downturn – at the expense of projects to raise living standards in deprived areas.

Mr Burden chairs the West Midlands Regional Select Committee in the House of Commons, which is in the middle of an inquiry into the effects of the economic downturn in the region.

He said: “I am very worried about this. Advantage West Midlands does face genuine problems and they can’t just be wished away. But, in the economic downturn, what is really important is that projects that help the West Midlands economy and which maintain social cohesion are not jettisoned. I would like to see evidence that the decisions about which projects to keep and which should not receive funding were made on a fair basis.”

Mrs Spelman said: “This is very disappointing news, and does emphasise that the Government is cutting spending despite the Prime Minister’s denials. I am very worried about what it means for projects in Chelmsley Wood, in my constituency, and will be trying to get answers out of AWM.

“It is so obvious that the West Midlands needs a great deal of regeneration, and actually a recession is quite a good time to do it. One of the industries that is suffering at the moment is construction, and if you scrap regeneration projects you are scrapping schemes that provided contracts and jobs to that sector.”

AWM was forced to rewrite its corporate plan for 2008-11, which was published last May. Businesses will receive extra help, with a new £64 million package of support to set up a loan fund for small and medium-sized businesses, a grant for property developers and more funds for the Manufacturing Advisory Service and Business Link network. And 784 projects will still receive funding, totalling £1.1 billion, the agency said.

Despite confirming that 122 schemes will not be funded, AWM has refused to reveal which ones will be affected.

A spokesman said: “A list of projects to which funding is no longer allocated will be released on request by Advantage West Midlands shortly. The release of this information to the media is being delayed slightly in order to ensure that affected applicants have received notification and had time to assess the impact of the funding decision.

“Some applicants may already be in discussion with alternative funding providers.”