Liberal Democrat leader Mike German is waiting to see which Assembley cabinet portfolio he will get after resuming his duties as Deputy First Minister.

He stood aside almost a year ago when South Wales Police launched an investigation into his past business dealings, but was given the job back when it was announced on Thursday that there would be no charges.

First Minister Rhodri Morgan announced Mr German was being instantly reinstated as his No.2.

And he promised that the AM would be given "a major role" in the cabinet once he had worked out his reshuffle.

The Crown Prosecution Service decided there was insufficient evidence to press criminal charges against Mr German in connection with his former role at the Welsh exam board (WJEC).

Allegations were made against Mr German concerning corporate expenses claims while he was head of the WJEC's European Unit.

But Opposition AMs urged Mr Morgan not to reinstate Mr German until a separate investigation by Olaf, the European fraud unit, had been concluded.

The 57-year-old has now been linked to a prominent Cabinet portfolio.

Mr German had always denied any charge of wrong-doing and he accused Labour figures of a politically-motivated witch hunt.

The CPS advised there is insufficient evidence of any criminal charges

Det Supt Graham Davies

He said he was now considering legal action, having accused the BBC of "libelling" him, but the corporation said its actions had been shown to be scrupulous and fair.

"I am absolutely delighted once and for all that this is behind me," Mr German said. "The past year has been the most difficult of my life."

And, he said, referring to the first minister's backing: "He (Rhodri) made a public statement that I would return and I know him to be a man of his word."

Minutes after the Queen left Cardiff Bay after addressing Assembly Members as part of her Jubilee tour of Wales, Mr Morgan told of his colleague's reinstatement.

Mr German always denied any wrong-doing

He said: "As part of the agreement between the Labour Party and the Liberal Democrats, the first minister has agreed to appoint the Liberal Democrat assembly leader to the Cabinet as deputy first minister.

"This will now take place with immediate effect and Mr German now resumes his membership of the Cabinet as deputy first minister.

It was last July that Mr German announced that he was to step aside temporarily as the deputy first minister because of the police inquiry.

Detective Superintendent Graham Davies, of South Wales Police, said on Thursday: "The Crown Prosecution Service has considered the file of evidence. They advised there is insufficient evidence of any criminal charges."

'Cooked up'

Mr German - who had the backing of Liberal Democrat leader Charles Kennedy - claimed at the start of the investigation that it had been "cooked up" by Labour "local government barons".

Their motive, he said, was opposition to the Liberal Democrat coalition with Labour at the Welsh Assembly.

Replaced by Mr Morgan himself in the economic development portfolio, Mr German's former post was later handed over to former business minister Andrew Davies.

Culture minister Jenny Randerson stepped into the role of acting deputy first minister.