Rhodri Morgan said the settlement had been good for Wales

In his spending review, Chancellor Gordon Brown announced that Wales will share 20,000 job cuts in devolved and local government across the UK.

Unions have estimated this will mean 6,000 posts could go in Wales.

But Mr Morgan said the Welsh assembly government was conducting its own review of public service spending, which would conclude in the autumn.

Assembly Finance Minister Sue Essex admitted that "thousands" of civil service jobs could be lost in Wales following Mr Brown's announcement, but said she doubted it would be as many as the 6,000 feared.

The cuts would affect civil servants working directly for central government and its agencies - not the Welsh assembly government.

The minister said a report on spending money efficiently in the public sector would be published in the autumn, and that no decision on assembly job losses would be made until then.

She also stressed that every attempt would be made to minimise job losses. Changes would be more likely to involve redeployment of staff than redundancies.

Mr Brown announced a 4% annual rise in the Welsh assembly government's budget, by �2.5bn to �13.6bn in 2007-8.

The increase included �555m which is intended to go towards the Objective One project, which aims to improve the economies of some of Wales' poorest regions.

Gordon Brown unveiled his spending plans to MPs on Monday

Mr Morgan said Wales had done well out of the deal, but would have to be careful how it used the cash it had secured.

"It has been a very tough spending round, but we have got a very good settlement," he said.

"But as the money available in the 2004-8 period is not as good as it was in previous settlements, we have got to make sure we get every best penny out of it in terms of spending on the front line."

Asked about potential job cuts, Mr Morgan said: "You can't really talk numbers.

"The treasury is entitled to make its own estimates and I can't quarrel with those; but they are not estimates we have come up with and we are the responsible body in Wales".

Mr Morgan said there were "huge savings" which could be made by cutting spending on "back office costs" such as sharing IT systems.

'Savage'

The main civil service union in Wales says it will fight Gordon Brown's plans to cut civil service jobs, partly because of the way it has been introduced.

The Public and Commercial Services (PCS) union general secretary Mark Serwotka said he wanted to get the message across that this was "madness for the people of Wales in terms of public service and our members".

"What this is about is politically-motivated job cuts that are announced first - that's why it is not a basis for making efficiency cuts."

He doesn't appreciate it was under his government these jobs were created in the first place David Davies, Tory AM

Mr Serwotka said the union was not against changes that would increase efficiency and maintain services.

Welsh Liberal Democrat leader Lembit Opik MP said the announcement about the job cuts "should have been announced by the assembly government, and not by Gordon Brown."

Plaid Cymru MP Adam Price called the announcement "the biggest public sector job cuts since the pit closures programme of the 1980s".

"These cuts are just as savage and just as irresponsible as anything Mrs Thatcher did," he said.

And Tory AM David Davies described Mr Brown's call for civil service cuts as "slightly incoherent".

"He doesn't appreciate it was under his government these jobs were created in the first place," he said.

"If they are unnecessary, why were they created and why do those people have to go through the pain of being thrown out of work?"