Councils and the assembly must work together to regenerate poorest communities, says the minister

Mr Davies will demand they make better use of the Objective One funding.

The minister is concerned that millions for the regeneration of some of Wales' poorest areas remains unspent. But the councils say regeneration takes time to put in place, and problems beyond their control contributed to an under spend last year.

Welsh Economic Development Minister, Mr Davies, told BBC Radio Wales' Good Morning Wales that the Local Regeneration Fund, which is for the authorities to use as match funding for European Aid, is being under spent year after year.

Wales is currently in the middle of receiving more than �1bn on European Objective One cash to help areas like the south Wales Valleys and west Wales regenerate and create new jobs.

My priority is delivery for people who live in Objective One communities and I am determined to deliver on that Andrew Davies

The minister said that the Euro cash was a "once in a lifetime opportunity" for Wales and he was not prepared to see it squandered.

He said the assembly was "elected as a government to deliver and maximise European funding" and this was his "number one priority".

Local government and the assembly were charged with working together on the matter.

"For a lot of councils, they may be under-resourced, they don't have the capacity with which to take forward an economic development programme and that's why it's even more important that we work with them...to deliver," he said.

Mr Davies said that the current system was not working.

"If there is a very significant under spend, I'm going to have to look at how that money is allocated," he added.

He said he was aware that a �50m under spend had now built up year on year and that could not be allowed to remain.

"Earlier this year I was told that there would be additional requirements, so I negotiated an extra �10m flexibility which could be carried over.

"I now find out that the figure was way below what I was being told by the local government association.

Andrew Davies will look at how the money is allocated if the system is not working

"My priority is delivery for people who live in Objective One communities and I am determined to deliver on that."

But Dr Kevin Bishop, head of regeneration at the Welsh Local Government Association, said they shared the minister's concerns.

"We don't want to see the money left in the bank and not spent.

Dr Bishop said other factors like infrastructure problems and not getting planning permissions had contributed to a �15m under spend last year.

But he said it was not "because the councils have been sat not doing anything" and they would continue to lobby for that money to be made still available.

"We would hope that �15m is still available because the projects do not disappear".