The First Minister said nothing had changed

Conservative leader Nick Bourne attacked Mr Morgan for leaving the assembly chamber just before members raised the issue, calling for Mr German to go.

Mr Morgan returned to cheers and claimed the argument had "no basis."

He said: "Today's debate in the National Assembly and in the media on the position of the Deputy First Minister is based on events which are entirely manufactured and have no basis in the real world."

When developments over the European Unit of the Welsh Joint Education Committee came to light in May, the First Minister said Mr German, who is also Economic Development Minister in the coalition cabinet, should step aside if the police decided there was a case to answer and conducted a formal investigation.

'No difference'

Mr Morgan told the assembly: "There has been no statement by the police which leads to the conclusion that there is a prima facie case for formal action against any Minister.

"No statement has been made which is any different to that which that would have been made when the complaint was first received by the police."

A report criticising the management of the WJEC's European Unit under Mr German has been in the hands of the police for several weeks.

It contains allegations regarding the misuse of the organisations's credit cards and overseas trips.

'Lack of respect'

Plaid Cymru had hoped to table an emergency question on the affair in the assembly chamber on Wednesday.

On Thursday, Plaid leader Ieuan Wyn Jones and the Conservative's Nick Bourne said the First Minister's absence from the chamber during the discussion constituted a lack of respect for the assembly.

Mr Jones asked that proceedings be adjourned to give Mr Morgan time to consider entering the chamber, but Presiding Officer Dafydd Elis Thomas rejected the suggestion because there was an important debate on equality to conduct.

A spokesman for the assembly said Mr Morgan left the chamber to attend to urgent business in his office.

The WJEC could have to pay back �1m

The First Minister referred to the statement he gave regarding Mr German's position in May, before the investigation in to the WJEC was confirmed, and said that nothing had changed.

Now the second most senior figure in the Welsh Assembly, Mr German controlled the European Unit in question during the period which is subject to the examination, yet is not himself the subject of the probe.

The inquiry has been looking at documentation including items from independent auditors who have examined the unit's books.

Denies wrongdoing

Mr German has repeatedly denied any wrong-doing in the matter and has insisted his name will be cleared.

The WJEC itself decided that allegations surrounding the use of exam board credit card and trips abroad should be referred to the police.

Last year, an independent audit of the unit by accountants PricewaterhouseCoopers said that the WJEC could be subject to a clawback of almost �430,000 by Europe.

But another independent review of the unit by auditors Bentley Jennison concluded that the WJEC could, in the event of an audit by the EU, have to pay back in excess of �1m.

It also points out discrepancies between comments made by Mike German and documentary evidence on file at the WJEC.