Members of the Welsh Assembly are to be told that the task of spending �1.3bn of European funds destined to help regenerate blackspots around Wales is running behind schedule.

The Objective One money is being provided over seven years to aid the regrowth of the economic blackspots of west Wales, the south Wales Valleys and pockets of north Wales.

Rhodri Morgan has been criticised

However, a progress report into the handling of the vital European funds has revealed �60m less has been channelled to projects than orginally promised.

The report - from the Welsh European Funding Office to AMs - has been written by the body which distributes Objective One money on behalf of the assembly administration.

It found �288.5m has been promised to 447 projects around Wales.

But, in its masterplan on how Objective One should work, the administration had claimed �348m should have been allocated by now.

Sources within the administration say the �59.87m shortfall - 17% of the available funds - will not be lost and that more can be spent in the coming years - particularly on road and rail links.

Infrastructure schemes have benefitted to the tune of �1.4m - less than 4% of the budget.

Ministerial matters

The programme first started to make approvals in October 2000, and just short of two years' worth of commitments have been made in under 15 months.

However, opposition AMs are claiming this as further evidence that Rhodri Morgan cannot take the roles of both First Minister and Economic Development Minister within the assembly

Mr Morgan took up the economic development portfolio "temporarily" last summer when Mike German, a Liberal Democrat member of the coalition, stood aside from the Cabinet while police investigated claims of fraud at his previous employer, an exams board.

Conservative AM for South Wales West Alun Cairns said:""The government of Wales have failed to show any leadership on this issue and as a result West Wales and the Valleys has lost out once again."

Record defended

But Mr Morgan played down the report's findings.

"You mustn't get like the craggie Scottish accounant about this," he told BBC Radio Wales.

"It's not a worry - by and large, this programme is a great success, not a failure; the level of projects is very healthy."

He said it was important to strike the balance between spend and strategy.

And, he said, it was crucial applications were considered on their merits instead of applicants rushing in with pet projects.