FIRST Minister Carwyn Jones today said he wanted to discuss the referendum to devolve full law-making powers with the Welsh Secretary when a new government is installed in Westminster.

The Welsh Labour leader said the hung parliament returned by last week's election had no impact on the Assembly so far.

Business was continuing as normal in Cardiff Bay while the parties hammered out a deal to form the next UK Government, he said.

Mr Jones told reporters his first priority was to discuss the timetable for a referendum - a central commitment of his coalition with Plaid Cymru - when a Welsh Secretary is appointed by the next government.

AMs unanimously voted to endorse the referendum in February, but the timetable and the question put to voters will be drawn up in Westminster.

Mr Jones said: "The first thing I will be doing when there's a new Secretary of State in place is to discuss the referendum and its possible timetable.’’ He said holding the referendum on the same day as a referendum to change the voting system for General Elections, a key issue at stake in the ongoing coalition talks, would "create big problems’’.

"We've begun the process of moving to a referendum and for me that's a priority,’’ he said.

He repeated his line that "all options are open’’ on the date - although it must be held no later than Assembly elections next May.

The question voters will be asked was yet to be decided, he said, adding: "The framing of the question will perhaps be the most difficult part of the process and that's going to have to be dealt with very carefully.’’ He went on: "Clearly I would prefer to deal with a Secretary of State who shares the same political values as me.

"What's important is that we have a Secretary of State who understands Welsh politics well, who understands the need to move towards a referendum and who understands the need to work very closely with the Welsh Assembly Government.’’ Asked what effect the instability in Westminster was having on the Assembly, he said: "None so far, because of course we are carrying on with business as normal.

"There's no business here that's being held up as a result of what's happening in Westminster.’’ He added: "There have been contacts between the parties, but not between the governments.

"There has been no official contact between the Assembly Government and the UK Government.

"It's true to say that I have been in contact with colleagues in London and I'm sure that's true of all parties.’’ On the prospect of cuts to Wales's £16 billion devolved budget, he said: "There's talk of in-year cuts if there were to be a Conservative-led government, although I am aware of the fourth-hand assurance that has apparently been given to us by George Osborne should he become Chancellor of the Exchequer with regard to us not having to make cuts this year, but having to make double cuts next year.’’ Such a situation "means we would have to make some very difficult decisions in the following year’’.