UPDATE 11.06am:

Reaction has begun to flood in to today's announcement on borrowing and taxation powers for Wales.

Rosemary Butler, presiding officer of the National Assembly and Newport West AM, said it "reaffirms, in my view, the need for an Assembly with greater capacity and with more AMs to robustly scrutinise the Welsh Government on what will be important and difficult decisions around Welsh taxation and borrowing.”

She had previously stated that the number of Assembly members needs to increase from 60 to 80 to reflect the body's increasing workload, after the Assembly got further law making powers in 2011.

The Federation of Small Businesses Welsh Policy Unit chair Janet Jones welcomed the announced mbut said there were unanswered questions, "cruically over the full devolution of business rates to Wales."

Andrew RT Davies AM, Tory leader of the opposition in the Assembly, said: “Carwyn Jones’ lazy Labour Government has shown how easy it is to spend other people’s money without responsibility for raising any of it, but now it is time to stop Labour’s whingeing and introduce some financial accountability."

Welsh Liberal Democrat leader Kirsty Williams said it had been an "uphill struggle" to get the Tories to agree to the Silk Commission recommendations.

She said: “I am very pleased that we will be able to make advances on the Silk Commission’s recommendations.

"It is no secret that the opposition and delay to this announcement has come from the Conservative side of the coalition. It has been an uphill struggle to get them to agree to implement these key recommendations."

UPDATE 10.58am:

First minister Carwyn Jones has suggested that money could be borrowed to build the Specialist Critical Care Centre in Cwmbran.

Welcoming David Cameron and Nick Cleggs’s announcement, Mr Jones said today was an important day in the history of Wales - “the announcement today shows that we are being treated as equal partners.”

As well as the M4 Relief Road Mr Jones suggested in a press conference that money could be borrowed to build a “new hospital”.

The Argus asked if he meant the yet-to-be-built Specialist Critical Care Centre in Cwmbran.

Mr Jones wouldn’t be drawn on a specific hospital, but added: “Having the ability to borrow means that we have more options on the table with funding projects like that.”

Mr Jones said that the package proposed by the UK Government was "substantial", although he said the Welsh Government was disappointed that air passanger duty for long haul flights is not being devolved.

“It means we will be able to consider the option of an M4 relief road but borrowing powers are much wider than that. We will be able to look at substantial projects around Wales in future," he said.

Mr Jones said they had been told legislation would be gotten through before the end of the current Parliament, which ends in 2015.

He welcomed that there would be a mechanism for a income tax referendum, but said it shouldn’t be devolved until there is reform to how Wales is funded, known as the Barnett Formula.

“We’re underfunded. We’re told we have to raise a portion of our income. That underfunding is not addressed,” he said.

The first minister said the Welsh Government will be able to borrow for the M4 relief road ahead of general borrowing powers being made available to the Assembly.

“It’s very difficult to give an absolute time table, we don’t know what obstacles might lie ahead. It’s a major project, we’re looking towards the end of the decade before the road will be open if that is what we do, bearing in mind the views of people in the consultation process,” he said.

David Cameron announces borrowing and taxes for Wales

THE M4 Relief Road could be open by 2020 after Wales was given the tools it will need to borow for it – with some taxes being devolved to Cardiff.

This morning prime minister David Cameron and deputy prime minister Nick Clegg announced in Cardiff that Wales will be given responsibility for stamp duty and landfill tax as well as borrowing powers.

Those powers will allow for the Welsh Government to build the new M4 – which is currently under consultation – with the First Minister saying it could be ready by the end of the decade.

A bill will also be provided in the House of Commons that will allow the Assembly to call for a referendum to allow it to vary income tax.

It means the UK Government agrees at least in part with the conclusions of the first part of the Silk Commission - with proposals to devolve air passenger duty were not to be seen this morning.

Mr Cameron told journalists in the Senedd that this was a further significant act of devolution, saying: “We believe in a strong Wales within a strong United Kingdom. I think it is good for a government to be responsible for raising some of the money that it spends.”

He announced that the Welsh Government would be given borrowing powers which he said were essential to allow it to “get on with the vital act of improving the M4.”

“This at the moment is like a foot on the windpipe of the Welsh economy,” he said, saying the powers would be put in place as fast as possible.

He said landfill tax and stamp duty land tax would be devolved to “help them manage these new borrowing powers and responsibilities”.

He added: “We will be providing through a bill in the House of Commons for a referendum, so if the Welsh Assembly want to hold a referendum on the devolution on part of income tax they will be able to hold that referendum.”

Wales’ first minister Carwyn Jones said in a later press conference that it was difficult to give a timescale on the M4 but said it could be ready towards the end of the decade.