Extra money has been pledged to increase bed capacity

Most of the money, announced by Ms Hutt on Wednesday, will be targeted at the Gwent Health Authority, which has excessive waiting times for orthopaedic services, which include hip replacements, knee joints and back surgery.

Extra beds for patients will be provided at two hospitals in the authority's area - and a day unit will also be opened at nearby Cardiff.

But the minister also announced that waiting lists were continuing to increase across Wales.

Health expert Professor Brian Edwards of Sheffield University was earlier brought in by Ms Hutt to help reduce waiting lists in the Gwent Health Authority.

There has been a significant increase in demand for orthopaedic services across Wales with an ageing population Jane Hutt

His report into Gwent Orthopaedic Services in January called for increased bed capacity after finding waiting times at the Royal Gwent Hospital, in Newport, were among the longest in the UK.

Speaking at the Welsh Assembly's Health and Social Services Committee, Ms Hutt announced that waiting times for orthopaedic operations in Gwent had fallen since the report but that a further �10m would be spent tackling the problem.

The �10m announced by Ms Hutt includes �6m to fund a 16-bed orthopaedic unit at St Woolos Hospital, Newport and an extra 20 beds at Nevill Hall Hospital in Abergavenny.

The rest of the money will fund a day unit at Llandough Hospital, near Cardiff.

Ms Hutt said: "Early action will go some way to alleviate the current pressures, but there is still much work to be done across Wales.

"In Gwent the Professor Edwards report highlighted management, innovation and capacity issues which all contribute to the long waiting times in the area.

"I have delivered on the capacity issue today, but this must be backed up by the other recommendations.

Waiting times at the Royal Gwent Hospital have been targeted

"The allocation of the substantial sums for capacity in Gwent is conditional upon the implementation in full by the Trust and Local Health Boards of the remaining recommendations in the report.

"There has been a significant increase in demand for orthopaedic services across Wales with an ageing population.

"The measures I have announced today will be key in addressing this."

Allan Davies of Gwent NHS Trust said: "It's very good news - we know that waiting times in Gwent are far too long.

"This investment, resulting in increased capacity, will lower waiting times."

The latest monthly waiting list figures announced on Wednesday revealed that the numbers waiting 18 months for orthopaedic treatment at the Royal Gwent dropped by almost half from 125 to 67 patients.

But over the month since the end of December 2002, the number of patients across Wales waiting for admission to hospital for more than 12 months rose by 0.6%, while those waiting more than 18 months rose by 6.3%.

However, out-patient waiting lists fell across Wales

The number of out-patients waiting more than six months fell by 1.2%.