91Èȱ¬

Business leaders say they oppose any plans to use tolls from the two Severn bridges to finance an M4 relief road.

Last week a Welsh government adviser said borrowing for the project could be funded from toll income.

The Federation of Small Businesses (FSB) said using tolls as a "cash cow" for the scheme was unacceptable.

But the Welsh government contradicted the adviser's remarks and said it would seek to reduce toll levels if control of the bridges was devolved.

However, it said it had not yet reached agreement to borrow the estimated £1bn needed to finance the relief road, south of Newport.

Adviser Gerry Holtham told 91Èȱ¬ Wales that the Welsh and UK governments were negotiating a deal to borrow the money against future income from the tolls.

He also said that the Treasury was digging its heels in over giving Wales borrowing powers without some devolution of income tax.

Now, Iestyn Davies from the FSB in Wales has demanded that what he called a "Mexican stand-off" over tax and borrowing powers for Wales must end as a matter of urgency.

He said the situation had "degenerated into something that one might expect to see in a bad western movie".

Mr Davies said his members needed to know how significant projects were going to be funded, but that keeping tolls on the Severn bridges after they reverted to public ownership towards the end of the decade was unacceptable, beyond the costs of maintenance.

He said there was a stand-off between Welsh First Minister Carwyn Jones and the Secretary of State for Wales David Jones, who represents Welsh interests at the UK cabinet table.

"On the one hand, we have the first minister saying we want powers to fund big capital projects but we don't want income tax," he said.

"Then we have the secretary of state saying 'well you can have this but you can't have that'.

"The FSB and other organisations know what we want - a good, honest funding settlement for the people of Wales and to be able to fund the kind of projects we can't currently afford.

"The FSB's members are clearly of the opinion that tolls are a necessary evil on the Severn crossings and, if they are to be maintained in the future as is highly likely, they should simply be there to cover the cost of maintaining what are vital pieces of infrastructure for south Wales.

"What we are not prepared to see is those tolls being used as some form of cash cow to subsidise borrowing to fund an M4 relief road."

The Welsh government has contradicted the remarks made by Mr Holtham last week. It said full borrowing powers - as recommended by the Silk Commission - would be needed for major improvements to the M4, which appears to rule out borrowing against future income from tolls.

In a statement it said: "We believe the UK government should devolve responsibility for the Severn crossings to the Welsh government.

"The first priority for the revenue raised would be to ensure effective maintenance of the crossings.

"With that secure, our intention would be to reduce the levels of the tolls and alleviate the burden on the economy.

"In order to be able to undertake large structural projects, such as the strategic enhancements of the M4 around Newport, the Welsh government requires the delivery of borrowing powers through the Silk process.

"This is of paramount importance."