The right-of-centre Policy Exchange think tank said regeneration projects should be abandoned and Northerners should be encouraged to move south – possibly to massive new developments around Cambridge and Oxford.
But councillor Warren Bradley (pictured), leader of Liverpool City Council, said: 'The past decade has seen unprecedented growth in Liverpool's economy, which has surpassed many Southern towns and cities.
'Even the report's authors said it was likely to be dismissed as barmy. It's the only thing they got right.'
The report, released today (13 August), argues that it is no longer realistic to expect the 'larger cities such as Manchester, Leeds and Newcastle' to help regenerate 'struggling nearby towns such as Liverpool, Bradford, and Sunderland'.
It reads: 'We believe that the government should roll up almost all current regeneration funding, and allocate it according to need.
'[While] no one is suggesting that residents should be forced to move, we do argue that they should be told the reality of the position: regeneration, in the sense of convergence [with the South], will not happen, because it is not possible.'
It adds: 'Furthermore, we do not believe that it is acceptable for planning policies to constrain internal migration as tightly as they do.'
Instead, the think tank calls for a more 'hard-headed' analysis of the 'regeneration potential' of towns and 'the acceptance that at least some of them have little prospect of offering their residents the standard of living to which they aspire'.
Bradford Council chief executive Tony Reeves said: 'The report is very inaccurate and has clearly been written with a lack of understanding or research into what is actually taking place in Bradford.
'The regeneration is moving forward extremely well with more and more private-sector businesses and developers realising Bradford's potential by investing heavily in a wide range of schemes.
'We have a growing population and the district is undergoing a period of massive regeneration, with schemes including the £750 million Listerhills Student Village and the £340 million Broadway shopping development set to really transform the city.'