THE M4 relief road could be open to motorists by the end of the decade after Prime Minister David Cameron said Wales will get the borrowing and taxation powers that will allow for it to be built.

For the first time Wales will have control over some of the taxes people and businesses pay in Wales – with the option in future of holding a referendum to allow the Assembly to vary income tax.

However first minister Carwyn Jones said that shouldn’t happen until the way Wales is funded is reformed.

Two small taxes – landfill tax and stamp duty land tax – will be devolved to help fund the borrowing with Mr Cameron saying the M4 was like a foot on the windpipe of the Welsh economy.

There is still some way to go before the first digger reaches Magor to build the M4 relief road, with a consultation on the project running until December 16.

However it means that Welsh Government will likely be able to afford a project that was dropped in 2009 due to its £1.2 billion cost.

The announcements were made by the Prime Minister and Deputy Prime Minister Nick Clegg at a highly-stage managed event in the Senedd this morning.

It means that the UK Government has accepted the findings of the Silk Commission at least in part, which a year ago proposed Wales get borrowing powers with some ability to tax.

But the study’s proposals for air passenger duty to be devolved were nowhere to be seen today.

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

In Newport Mr Cameron visited Owens Road Service depot in Newport, where he said lorry drivers told him of hours of delays.

He said: “I said to the First Minister today with these new borrowing powers everything that could be done to speed things up should be done."

Mr Cameron said the M4 has been “a real foot on the windpipe of the Welsh economy because the queues and traffic backs up from the tunnels.”

Earlier in the day the Prime Minister told journalists in Cardiff it would be good for government to be “responsible for raising some of the money that it spends”, saying that landfill tax and stamp duty land tax would be devolved to help Wales manage its borrowing.

Mr Cameron said a bill would be introduced to the House of Commons to allow for the Welsh Assembly to hold a referendum on devolution of income tax, if it wants to.

Mr Clegg, who later visited the Glan Llyn housing development in Llanwern, said: “It’s a real milestone in the devolution of powers to Wales and a big step forward in our shared economic recovery.

“I’ve been a lifelong supporter of devolution generally. We’re a stronger family of nations together, a family of communities together, where you can devolve as much power as possible.”

Once the measures are passed in Parliament, the rate of stamp duty paid on the purchase of a house will go to the Welsh Government instead of the Treasury, with AMs able to vary the tax.

In 2010/11 revenues from the tax were worth £115 million. Landfill tax, also to be devolved, was estimated by the Silk Commission to be worth £50 million in Wales in 2010/11 and is paid for by operators of landfill sites.

Legislation on the measures is likely not to come into effect until after the general election, according to the first minister Carwyn Jones who indicated that the new M4 could be ready by 2020.

He told journalists that the Welsh Government will be able to borrow for the M4 relief road ahead of general borrowing powers being made available to the Assembly.

Mr Jones said it was very difficult to give an absolute time table on when the M4 relief road could be built: “We don’t know obstacles might lie ahead”.

But he added: “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.”

Mr Jones said borrowing powers could be used for other projects as well such as a new hospital.

He wouldn’t be drawn on whether that could include the Cwmbran Specialist Critical Care Centre but said: “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-passenger duty for long haul flights was not being devolved.

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.

Environmentalists have continued their long running opposition to the plans for a motorway on Gwent Levels.

The Campaign Against The Levels Motorway's Tom Clarke said: "What could we buy as a nation for the same sum of money that is being lined up to spend on this unnecessary road?

"A motorway through this special area will result in damage to biodiversity, local businesses, agriculture, recreation and local tourism and may well open the doors to much more built development in this specially protected area,” he said.

Rosemary Butler, Newport West AM and presiding officer of the National Assembly for Wales, welcomed the announcement, saying devolution of financial powers was supported by all parties.

But she added: “This announcement today 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.”

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."

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

She said: “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."

Newport-based South Wales East AM William Graham, who has campaigned for the relief road for 25 years, said: “After years of indecision by the Welsh Government, the impetus for the enhancement of the major road transport artery across South Wales has been driven forward by the Conservative led Westminster Government”.

Leanne Wood, Plaid leader, warned that the Welsh Government should move ahead as quickly as possible to devolve Income Tax powers.

“The Welsh Government must be responsible for raising a material proportion of its revenue – following the practice of other OECD countries,” she said.

David Jones, Secretary of State for Wales, said: “The current road of course is a huge bottleneck, it’s a huge impediment to businesses and to commerce.”

He added that if the Assembly take the decision to have a referendum, Wales could have the opportunity of “make Wales a more prosperous and richer place” by going for a low-rate of income tax.

Silk Commission chairman Paul Silk said today’s announcement “is an important step in bringing greater empowerment and responsibility to the National Assembly for Wales, which we believe is necessary for devolution in Wales.”

The second part of the Silk Commission’s work – on the powers of the Assembly – is expected to report back next year.

Rupert Joseland, Regional Director for St. Modwen in Wales which is responsible for the Glan Llyn housing development Mr Clegg visited, said the devolution of stamp duty was good news.

“It remains to be seen how this new power will be used. Putting up stamp duty would generate additional revenue for the economy but to stimulate more house building stamp duty would need to come down," he said.