The Conservatives would hold a root-and-branch review of the way Wales is run if they win the next election under proposals put to David Cameron today.

In a report on devolution commissioned by his party leader, Tory peer Lord Roberts said a Conservative government should examine the way Wales has been governed since the creation of the Assembly and take account of its relationship with rest of the UK.

If the Assembly wants to hold a referendum on acquiring full law-making powers it would be up to a Tory Westminster administration "to consider the proposal on its merits’’, he said.

If a referendum is put before voters before the next election, Conservative Party members will be free to decide how they campaign.

The Tories opposed devolution in 1997, but its leader in Cardiff Bay, Nick Bourne, now supports handing full law-making powers to the Assembly.

The Assembly Government has offered the prospect of a referendum on a Scottish-style settlement before 2011 as part of the coalition deal between Labour and Plaid Cymru.

Former Welsh Office minister Lord Roberts was asked to map out the Tories' position on devolution by Mr Cameron in March and was expected to publish an interim report in July.

Unveiling his initial findings in Westminster today, Lord Roberts said: "The question of governance in Wales will eventually be settled in the broad public interest and not in anyone's narrow partisan interest.

"I will be continuing to review and update developments for David Cameron and the party.’’