Budget passed as Plaid backs Labour.

Byline: By Paul Carey and Martin Shipton Western Mail

Rhodri morgan said Wales' children had won when his Budget was approved by the Assembly yesterday thanks to a last-minute deal with Plaid Cymru. Ministers dredged up an extra pounds 2m for education after meetings with Plaid leader Ieuan Wyn Jones. Mr Jones walked away from an opposition alliance which outnumbers the minority Labour Government in Cardiff Bay earlier this week. Plaid claimed a victory yesterday, but the Tories and Liberal Democrats said Mr Jones had 'caved in' for a 'pittance' in a Budget of more than pounds 14bn. FROM PAGE 6: End of the rainbow coalition as Plaid turns to Labour:The prospect of Ieuan Wyn Jones becoming Deputy First Minister next May in a Labour-led coalition has risen markedly after a deal between the two parties secured the National Assembly's Budget yesterday. As predicted in the Western Mail, private talks held between Rhodri Morgan and the Plaid Cymru leader in Room 13 of the Senedd on Tuesday, resulted in agreement between the minority Labour administration and Plaid over spending plans for 2006-07. All the pounds 9.3m additional money allocated to the Assembly by Chancellor Gordon Brown last week will be spent on schools, plus a further pounds 2m taken from the Assembly's reserves. Every secondary school will receive an extra pounds 2,000 to cover heating bills, with pounds 1,000 for every primary school. The emphatic way in which Mr Jones broke with the Conservatives, accusing them of being untrustworthy, leaves little doubt that the possibility of a 'rainbow coalition' comprising Plaid, the Tories and the Liberal Democrats is a dead duck. Last week Mr Jones made it clear Plaid was not prepared to force Rhodri Morgan out of office over the Budget - a position that led to the Conservatives accusing him of weakness. Yesterday Mr Jones said he had 'virtually' ruled out working with the Tories after May. He described an article in yesterday's Western Mail that suggested the possibility of a future Labour-Plaid coalition as 'reasoned'.

The Plaid leader said of the Tories, 'Once they started accusing me of being weak and of going back on what we had agreed, it was the beginning of a breakdown in trust. Then, after a meeting on Monday involving all the opposition parties, I was appalled to learn that the Conservatives had been briefing against me again within 10 minutes of the meeting ending. I have been around for a while and done deals over the years, but never before have I been in a situation where details of private discussions at this level were leaked to the media. I just can't trust people like that.

'The fact is, they weren't interested in a Budget settlement, they only wanted to score political points.'

By contrast, Mr Jones was complimentary about the dealings he had had with the First Minister.

'In my dealings with Rhodri Morgan I have always found him professional and honest,' he said.

Mr Jones said Plaid had decided not to vote against the Budget because of the extra money for schools. It was short of what they would have liked, but Labour had said that any further money would have to be funded by cuts elsewhere in the Budget.

Mr Jones said, 'We were not interested in robbing Peter to pay Paul.'

The Western Mail understands Plaid originally asked for an additional pounds 10m, but Finance Minister Sue Essex was only prepared to raid the Assembly's reserves by a further pounds 2m to secure the deal.

Mr Jones made it clear that between now and the dissolution of the Assembly at the end of March, Plaid would look at each issue on its merits. On issues on which they opposed the Government, Plaid could vote with other opposition parties against Labour.

On the prospect of a rainbow coalition involving Plaid and the Tories, Mr Jones said, 'It was always going to be difficult because of our different approaches to politics, but what has happened now makes it extremely difficult.'

Asked whether that virtually ruled out the prospect of Plaid and the Tories working together after next May, Mr Jones said, 'Yes, it does.' Inevitably, the Budget deal greatly increases the possibility that Labour and Plaid will form a coalition after next May's election, with Rhodri Morgan staying on as First Minister with Mr Jones as his Deputy. Such a deal could be on the cards if, as seems likely, Labour falls several seats short of an overall majority. Labour and Plaid were both playing down the possibility, but both the Conservatives and the Liberal Democrats were already referring to Plaid as 'Rhodri's little helpers'. In what may prove a timely portent, Labour and Plaid yesterday agreed on a coalition to run Vale of Glamorgan Council, following their removal of Tories from power last month. There will be six Labour Cabinet members, three Plaid, plus an Independent.: LABOUR REACTION:Finance Minister Sue Essex said, 'This represents a major investment by the Welsh Assembly Government in the education of children in Wales. 'I am sure that today's announcement of additional money will be warmly welcomed by parents, teachers, school governors and local authorities throughout Wales. We are determined that the money will be spent on children. 'As a Government we have done our best to act responsibly, while trying to take into account all views. There is always a limit on finances, but we have squeezed resources and worked until the very last minute to come up with a budget for all of the people of Wales.': PLAID CYMRU REACTION:Plaid Cymru leader Ieuan Wyn Jones said, 'We could have had more but it would have meant cuts in other budgets. 'At the end of the day, for me, this is about honour and integrity and the other parties unfortunately broke that because when we were having negotiations between us they were immediately briefing the press about the contents of those negotiations. 'Schools will benefit from an extra pounds 13.3m next year thanks to Plaid's budget negotiations. This will save teachers' jobs and keep class sizes down. 'These reasonable and responsible budget negotiations have delivered a budget that will make a real difference to Wales.': CONSERVATIVE REACTION:Welsh Conservative Assembly leader Nick Bourne said, 'Labour's little helpers have sold out for less than 30 pieces of silver and betrayed pupils, parents, teachers and universities across Wales. 'The shabby backroom deal cooked up between Ieuan Wyn Jones and Rhodri Morgan short-changes schools and universities by millions of pounds. 'This deal would not have been accepted by the three of us (opposition party leaders). I know that, Mike German knows that and Ieuan Wyn Jones knows that. 'The Plaid leader has been conducting two sets of negotiations - one with the Government and one with his own party. And the one he was finding more congenial and easier was the one with the Government.': LIB-DEM REACTION:Welsh Liberal Democrat leader Mike German said, 'By working together the opposition parties have been able to achieve significant improvements to the budget. 'Working alone, Plaid Cymru have secured an additional pounds 300,000. Together we were looking for money equivalent to the salaries of 200 teachers. Plaid Cymru have caved in for 10 teachers. That's not good enough. They will go in to the election as 'Labour's little helpers'. 'Let's remember why these talks stalled - because Labour wouldn't give a fair deal to schools, and they are selling our universities short. When Ieuan and I left the negotiating table, we were clear - what was on the table wasn't good enough. It still isn't.'