- Published
Welsh First Minister Rhun ap Iorwerth says there has been a "significant step forward" with regards to his country's spending and borrowing powers after meeting the prime minister.
Andy Burnham held a meeting of his National Economic Council with the first ministers of Wales and Scotland on Friday, after which ap Iorwerth said it was a matter of "how and when" a loosening of financial restrictions will take place.
At the summit in Glasgow, Burnham lobbied the government leaders to devolve "deeper" to the regions of Wales and Scotland.
The prime minister said the two first ministers had agreed to work with him on "regional empowerment".
No timescales were announced for changes to Wales' finances.
Friday's meeting followed rows between the Welsh and UK government over the chancellor's Budget on Wednesday, which ap Iorwerth had said was "not serious about Wales".
His party Plaid Cymru said the budget left the Welsh government with a real-terms cut in funding, which the UK government denied.
Ap Iorwerth had set out a range of demands to the prime minister in a letter sent at the start of October.
As well as calling for powers over policing and justice, and for more funding for rail projects, he called for an end to restrictions on access to the Wales reserve - spare funding that the Welsh government can store in one year to use in another.
It is capped at £350m, and the Welsh government can only draw down £125m and £50m for resource and capital spend respectively per year.
The Welsh government can also borrow up to £1bn for infrastructure, with a limit of £150m a year.
Ap Iorwerth said: "There were some real positives here.
"On fiscal flexibility, the ability for us to use our funding better in Wales, use our reserves better in Wales - and on borrowing powers, I was told clearly that its now was a matter of how and when. That is a significant step forward."
He said there was "clearly an interest" for the prime minister to "really understand that sheer injustice of underfunding of rail in Wales that we have seen for many years".
"That is a particular issue we will be taking forward now between my office and his," he said.
On policing, the first minister said "I think instinctively the prime minister wants to go there and there's still work to do".
At a speech this month the first minister called for "practical agreement" on how the two governments could work together on the economy, calling for Westminster to avoid duplication in areas that are devolved already to the Welsh government.
Burnham said Friday's meeting was "positive", and that both first ministers had agreed to "work together jointly on regional empowerment in Scotland and Wales as well".
"We now have a process where we have detailed work by officials on both sides to see if we can come to a set of arrangements that are right for Scotland and right for Wales," Burnham said.
"We had a good discussion today on two fronts, one around re-industrialisation and the offer of more devolution of innovation funding to the regional level."
He said it was for Scotland and Wales to decide how that looks.
Burnham also said the UK government will now look at arrangements for further devolution of employment support.
Welsh Secretary Stephen Kinnock fiscal flexibilities and borrowing was on the agenda for future Welsh government discussions with No 10 North.
"It is going to take some conversations on how that would work in practice.
"I can't give you a specific time frame as things stand," he said.
Following Wednesday's Budget, which saw an extra £450m announced for Wales over the next three years as well as funding for individual projects, the Welsh government claimed the extra money would represent a real-terms cut to its own finances.
A £30m funding pledge for a new railway station in Cardiff was also described as "an insult" by Wales' transport minister.
On Radio Wales Breakfast on Friday before the summit, ap Iorwerth said there were "paltry sums of money coming on rail, when they've said there's £14bn on the way" and a "real terms cut in the money we have to spend on public services".
"The Budget was not serious about Wales," he said.
He said in another interview he could "only assume that the prime minister is holding something back".
After the meeting, Downing Street said ap Iorwerth had "agreed to start a process to explore how each government could contribute to regional empowerment, reindustrialisation and achieving good growth in every postcode".
"This would be a policy sprint led by No 10 North, involving officials from each government, to take this agenda forward," they said.
Ap Iorwerth said in a statement: "There was an encouraging consensus that the fiscal and borrowing powers which have for so long put Wales at a disadvantage compared with other UK nations must be revised as a matter of urgency.
"I welcome the prime minister's comments that this is now a matter of how and when."
Welsh ministers had called for changes to their borrowing rules and assurances that child poverty payments it wants to introduce would leave recipients' tax and benefits allowances unaffected.
None of that was addressed in the Budget, although Welsh Secretary Stephen Kinnock has said "positive" talks were continuing regarding the child poverty payments.
Friday's meeting of the National Economic Council - a summit to help boost the UK economy - was due to be attended by the prime minister and all the devolved leaders.
However, it emerged on Thursday that Northern Ireland's First Minister Michelle O'Neill would not be there after her attendance was blocked by her Democratic Unionist Party (DUP).
Since he became prime minister, Burnham has consistently spoken in favour of devolution.
He has said he is "open" to transferring powers over policing and justice to Wales and, during Prime Minister's Questions on Wednesday, he said he was "ready to make an offer" on the devolution of employment support.
