WALES' economic development minister, Andrew Davies, yesterday defended the way that millions of pounds of regeneration funds from Europe is managed.

Mr Davies was questioned by a committee of AMs following the publication of a report, criticising aspects of the way the Objective One European Union fund is managed. The £1.2bn fund is provided by the EU for job creation projects in the Valleys and West Wales between 2000 and 2006.

As the Argus reported, the mid-term report by independent analysts found that £1.1bn of EU money and match funding had only created 10,500 jobs - and recommended "a clearer lead" from the National Assembly.

Yesterday the Argus reported that over five times as many Objective One projects were approved in Cardiff than in Blaenau Gwent.

Since Objective One funding started, 105 projects were approved for Cardiff, 20 in Blaenau Gwent, 16 in Torfaen and 26 in Caerphilly.

Torfaen AM Lynne Neagle, economic development committee member, said: "I do have concerns about the amount of overall Objective One funding that is coming to the South Wales valleys.

"A disproportionate amount is going to other parts of Wales, particularly north- west Wales, and this is something that needs to be urgently addressed."

Mr Davies replied: "I agree that resources should focus on areas of greatest deprivation, but the way the statistics are gathered does skew the figures and does not show clearly what is happening."

But South Wales West AM Alun Cairns said: "If the second half of this process is as much of a failure as the first half, then it will be a disaster for the most deprived areas. "I'm extremely troubled that the minister does not accept that failure, because without addressing the problem we cannot put it right."

Mr Davies said: "I refute that Objective One funding is a failure. This report says that broadly we are meeting our targets and, although we can't be complacent, things are going in the right direction."

Afterwards, CBI Wales director David Rosser told the Argus he was not surprised by the low numbers of jobs created so far.

He said: "The elaborate policies and procedures in place haven't made it easy for projects to be put forward and approved. The CBI has been calling for the policies and procedures to be simplified."