It was a completely transparent process and at the end of the day the right decision was taken - and I think history proves that the right decision was taken.

Former Welsh Secretary Ron Davies

"We thought we were being treated fairly. The fact that we were treated unfairly and that there was a major political conspiracy against us, we weren't aware of at the time."

Mr Hedges chose to speak out on the day that assembly members and civil servants were criticised for their handling of plans to locate the headquarters in Cardiff Bay.

The assembly's financial watchdog attacked the management of costs involved in the project.

A report by the audit committee published on Thursday concluded that costs of the project had been consistently underestimated.

Swansea's Guildhall had been considered a strong contender in the contest to house the assembly.

Ron Davies: Contest between cities

There were feelings too that choosing a location other than Cardiff would lay to rest criticisms that the capital city had a charmed existence.

Former Welsh Secretary Ron Davies opened up the contest between Swansea and Cardiff.

The audit committee did not directly criticise Mr Davies, but its report described the decision was "reprehensible".

Mr Davies said he stood by the decision and said there would have been "a hue and cry" if Cardiff had been given the green light without any consultation.

The fact that we were treated unfairly - and that there was a major political conspiracy against us - we weren't aware of at the time

Swansea County Council leader Mike Hedges

"The rules of the competition were absolutely fair," he said.

"It was a completely transparent process and at the end of the day the right decision was taken - and I think history proves that the right decision was taken."

Swansea Liberal Democrat AM Peter Black said Mr Davies should be called to explain the "sham competition". He added that Swansea's bid had offered the "best value for money" to taxpayers.

The spiralling costs and management of the assembly scheme are a major concern held by members.

Rising costs

The annual bill for running the "temporary" headquarters at Crickhowell House has risen sharply.

Projected costs for the proposed glass chamber have also risen to an estimated �27m.

Swansea council deputy leader Lawrence Bailey said the report highlighted what was already known from the Auditor General's conclusions.

Cardiff MP Jon Owen Jones said the affair was dwarfed by the current debacle over the new Wembley Stadium project - and the huge costs of Scotland's own new parliament building.

'One horse race'

Two years after the assembly came into being, the foundations of the new chamber are now being laid.

In 1998, Swansea was invited by Mr Davies to compete in the race to house the assembly.

But the report concludes that this was effectively a "one horse race".

The bidding process created unnecessary division between Swansea and Cardiff.

Tighter controls

The capital won with Mr Davies sealing a deal to buy the bay site for �1 from Cardiff Bay Development Corporation.

The Audit Committee is now calling for far tighter controls over the way the new building is managed so that history does not repeat itself.

Last June, Assembly Members voted in support of Sir Richard Rogers's design for a new �27m state-of-the-art Welsh Assembly debating chamber.

Members voted against an option, backed by the Assembly's minority Labour administration, for an extension to their existing temporary headquarters in Cardiff Bay.

First Minister Rhodri Morgan - who preferred the cheaper option of an extension - inherited the Rogers plan from his predecessor Alun Michael.

Mr Morgan put it on hold while he considered whether it was good value for money.

But the idea of an extension - criticised as a "ridiculous carbuncle" - was rejected in a vote by AMs.