The Welsh Assembly has been accused of bowing to Westminster in a dispute over who should foot the bill if Wales opts out of introducing top-up fees.

Education secretary Charles Clarke and Welsh Assembly education minister Jane Davidson were this week expected to issue a statement on conclusions reached in talks about devolving powers on student support to Wales.

Assembly ministers were keeping tightlipped about the results of the negotiations this week, after having to water down claims earlier this year from Welsh Secretary Peter Hain that a deal had been struck that would give Wales the power to ban top-up fees.

In May, Mr Hain said the discussions were "well advanced", but questions about future demographics, the flow of students between Wales and England and funding had "made the calculations more difficult than expected".

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This week, the Liberal Democrats claimed the assembly had caved in to pressure from Westminster to abandon its promise that any transfer of powers and funding would not leave Wales lacking financial resources.

Welsh Liberal Democrat education spokesman Peter Black said Ms Davidson had confirmed in a report to the assembly's education committee that any moves to block top-up fees would have to be paid for out of existing resources.

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He said: "The minister has confirmed what we had always suspected but has been kept unclear - that the UK government is forcing us to use an inadequate block grant to stop unpalatable initiatives in Wales that they are foisting onto the English."

Mr Black claimed that without extra funding, it could cost Wales ?110 million to block top-up fees.