A Cabinet Minister would become regional minister for “Greater Birmingham” if Lord Heseltine gets his way.

Every Cabinet Minister and every permanent secretary, the most senior civil servant in each Whitehall department, should be allocated two LEPs to work with, the Tory peer said.

They would then be expected to visit the LEPs at least every two months.

Regional ministers were originally introduced by Gordon Brown, but they were scrapped by the Coalition government.

Ministers for the West Midlands included Liam Byrne (Lab, Hodge Hill) and Ian Austin (Lab, Dudley North).

Lord Heseltine, who launched his No Stone Unturned In Pursuit of Growth report at Birmingham Town Hall on Wednesday, also called on cities which rejected mayors to think again.

“I was disappointed that more cities did not choose to opt for a mayor,” he said. “It confirmed my fear that relatively few would vote and that party loyalties would determine the outcomes.

"I believe this issue needs to be revised to give our cities the influence and leadership commonly found in similar economies.”

Coventry and Birmingham were among the cities that voted “no” to creating a directly-elected mayor to replace council leaders, in referendums in May.

And Lord Heseltine called on the government to introduce laws allowing neighbouring councils to create a “conurbation mayor” to oversee the region – without needing a referendum.

While many of his recommendations focused on reforms to local government, he also warned changes were needed to the way central government operated, saying it “needs to work in a fundamentally different way to deliver growth”.

In what could be seen as a vote of no confidence in the Treasury – or in chancellor George Osborne – Lord Heseltine said the Prime Minister should chair a new Growth Council, which would be just as important as his current role chairing the National Security Council.

At the same time, business leaders and ministers would organise new industry councils for each sector, similar to the Automotive Council which already exists.

The industry councils would help the Government draw up a long-term national growth strategy “setting out its vision for wealth creation, with concrete commitments against which it can be held to account”.

Each LEP would then draw up a local economic plan, setting out how it intended to help achieve the national aims. Chambers of Commerce would be given a major new role, backed up by laws officially setting out their responsibilities.

These would become a “one stop shop” for businesses, providing practical advice and support, for example on issues such as exporting or training.

They would also represent the business community to the wider community, particularly schools and colleges.

Lord Heseltine demanded tough action to raise school standards. warning: “Nearly one in four of the working age population are not functionally numerate, and almost one in six do not have functional literacy skills.

Today, according to Ofsted, there are still 571 inadequate schools in England – around 2.5 per cent of all maintained schools.

“Poverty, ethnicity or the social confusions in a school’s catchment area are sometimes used as justification for sink schools.

“There is no need for this to be the case.

“With effective leadership and teaching, good schools can exist everywhere.

“There is no excuse for failure.”

In other recommendations, Lord Heseltine urged the government “to clarify urgently” its preferred solution to the problem of airport capacity in the south east, including whether it planned to allow a third runway at Heathrow or not.

And he said Britain needed “a clear and consistent long-term energy policy”.