The money is directed towards areas like the south Wales valleys

Economic Development Minister Andrew Davies said it was a vote of confidence in European funding schemes in Wales.

The money has been allocated because Wales has met EC targets for three types of funding, objectives one, two and three.

The Objective One programme, worth �1.2bn to west Wales and the valleys, is due to end in 2006.

Opposition politicians have criticised the Welsh Assembly Government on the handling of Objective One.

But the assembly government said this new money was evidence of the success of European structural funds programmes.

Mr Davies said: "Structural funds are making a huge difference across Wales, creating jobs, increasing opportunities and helping to regenerate our poorest communities.

"Today's announcement by the EC is clear proof of our success in shaping the European structural funds programmes and driving them forward.

"I would like to offer my warmest congratulations to the Welsh European Funding Office and their partners for their sterling work in managing this extremely complex programme."

Wales MEP Glenys Kinnock said: "The European Commission has never recognised the bleak picture painted by some in Wales regarding funding and this is exemplified by the news today.

"You can engage in all the petty political point-scoring you like, but the basic fact is this - the performance reserve is only allocated if you hit your targets and that is what we have done in Wales."

The total of �65.4m (91.6m euros) will come from a reserve fund set up by the EC to reward management of its programmes.

Unlike the other European funding it receives, Wales will not have to supply match-funding - in other words, an equivalent amount - for the �65m.

The money will be used on such areas as regenerating town centres, supporting innovation, research and development, and helping small and medium-sized business.