An official report witten by Welsh Economic Development Minister Andrew Davies stated that the assembly government needs to make up �15m in match-funding in the Pathway to Prosperity pot - this provides assistance to the regeneration projects.

The report went on to say that Mr Davies was discussing with cabinet colleagues how their budgets could contribute to the structual funds.

But speaking on BBC Radio Wales' Good Evening Wales programme, the minister denied asking for help from education and health budgets and said the money would be provided by the economic development budget.

Critics said that the minister was asking other departments to contribute to match-funding in order to meet the shortfall identified in his own budget.

Mike German, the Liberal Democrat former economic development minister, said he believed the assembly government failed to foresee the need for match-funding at this high point in the project.

He said they always knew they would have to spend more as the programme went on.

But Mr Davies denied there was a shortfall.

"We have always made clear provisions for match-funding for projects, we have looked at the budgets and indications show that it exceeds the allocation by around �15m," he told Radio Wales.

Andrew Davies denied there was a shortfall in match-funding

"If it exceeds the match-funding then I will find the money from my own budget not from other ministers' budgets."

He denied that "being in talks with other ministers" meant that he was intending to use their budgets to fund the "shortfall".

"I'm talking to other ministers to make sure that there is a closer match between Objective One and assembly progress, to get more bangs for their budgets. Match-funding is a separate issue."

"No worthwhile project will fail through lack of funding."

Speaking at the assembly Plaid Cymru AM Elin Jones said: "I called for an investigation into match-funding in the economic development committee before Christmas but committee members were told that Andrew Davies would be presenting a paper on the situation.

Assembly statement

"Today's report confirms our worse fears. There is a shortfall of around �15-20m in the budget and an admission that projects that have been led to expect Objective One money, will never see the light of day."

In November, Radio Wales reported concerns among some Objective One projects that a major shortfall running into tens of millions of pounds had arisen in the match-funding.

Match-funding means that every pound granted from Europe must be matched with a pound from here.

This comes from a variety of sources, but a substantial portion is from the Welsh assembly.

The programmes are designed to benefit the poorest areas of south, west and north Wales in the period running from 2000 to 2006.