Mike German: Called for greater powers

Mr German was backed by senior Liberal Democrat MP Malcolm Bruce.

Mr Bruce, who is responsible for co-ordinating the party's representatives in Westminster, Europe, Cardiff and Edinburgh, said Walea and Scotland should have tax-raising powers.

He said the current settlement was unsustainable unless it was followed by financial devolution.

"Devolution can only work if not only political control is devolved, but financial responsibility as well," he said.

"Eventually the Treasury will have to devolve some its tax revenue to the Scottish Parliament, the Welsh Assembly, the English regions and local authorities."

However, a senior Liberal Democrat MP has warned the party against the dangers of forming a coalition with Labour in the National Assembly.

Simon Hughes, MP for North Southwark and Bermondsey, told a fringe meeting at the Welsh Liberal democrat Conference that the party should wait until after the next general election before deciding whether to do a deal with Labour.

He said coalitions should only be contemplated when both parties could command a majority of the votes.

The Liberal Democrats and Labour together polled less than 50% of the vote in the Assembly Elections.

But a former Welsh Tory MP Keith Raffan, now a Lib Dem member of the Scottish Parliament, said coalition government was working in Scotland.

Flourishing arts

Meanwhile the party's former Welsh leader Alex Carlile has called for radical changes in the way the arts are managed in Wales.

Lord Carlile said the arts must be encouraged to flourish in every corner of the country.

He said that arts' bodies must be made much more accountable.

Cardiff Central AM Jenny Randerson said the Assembly's current review of the arts in Wales was one of the first examples of devolution making a difference, thanks to sustained pressure from artists.

Reacting to Mr German's call for power-sharing a Labour spokeswoman said: "We believe people want day to day co-operation in the Assembly not grand pacts and coalitions."