Welsh Finance Minister Edwina Hart reiterated the UK Government's pledge that it would not stand in the way of businesses expanding into frontline public services.

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But Mrs Hart added that the statement did not amount to services being privatised.

The government is keen for more involvement of private firms in financing and sometimes running public sector projects.

PFI-built schools, such as Ysgol Gyfun Penweddig in Pembroke Dock, west Wales, are built and then leased back to the local education authority.

But Plaid Cymru's Janet Ryder said the assembly had been forced to follow the Private Finance Initiative (PFI) line by Westminster.

'Investment partnership'

The minister explained that the assembly was committed to ensuring that capital investment for services should come mainly from "conventional means".

In a statement following public consultations, Mrs Hart spoke of "investment through partnership" in Wales, branding the ideology as "the Welsh way".

She described the concept as a "flexible and pragmatic" approach of sourcing capital finance, adding to public sector funding.

"The rest of the UK finances part of its investment in public services through PFI.

"We either mirror this form of investment or accept that Wales will have a lower level of investment."

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The GMB union, which has thousands of members in Wales, has nationally opposed PFI schemes.

Ms Ryder, Plaid's shadow local government minister, asked Mrs Hart: "Would you agree that there is no fiscal or economic case for the use of PFIs?

"I think that does come through in your statement and I don't think you are really personally happy with the use of PFIs.

"I think that you feel that you are being forced into this. It does seem to come clearly in your statement that it is the Treasury in London that is forcing people down this path which really nobody wants to go."

But in October, the whole issue of hospitals being built under PFI schemes was criticised by the head of the government's own advisory board, Sir Stuart Lipton.

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He warned not enough attention to detail was paid to projects, which faced basic problems such as leaking sewage, unusable rooms and no air conditioning.

But Mrs Hart spoke of making use of specialist skills and experience provided by private firms.

"The Assembly does not intend to privatise public services.

"Rather it seeks to deliver those services by the most efficient and effective means available under the direction of the relevant public body," said Mrs Hart.

Rising costs

The administration's decision not to use PFI to build two new hospitals in Wales was thought by observers to indicate it would not follow the PFI road.

Assembly Health Minister Jane Hutt has previously stated a preference for public funding, based on rising bureaucratic costs linked to PFI.

The issue of staff transferring from the public to private sector has also aroused concerns.

Mrs Hart explained in most cases the issue would not arise because most public sector staff were involved in providing rather than managing services.