Employers and unions have reached a settlement
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The Welsh Assembly Government will be given overall responsibility for the fire service in Wales, in a transfer of powers from Westminster.
It will be responsible for policy and funding of what will now be called the Fire and Rescue Service, but pay rates will still be decided at a Wales and England level.
Under the proposals - announced by Deputy Prime Minister John Prescott in the Commons - the assembly government could opt to get rid of three fire authorities and create a single unitary body to save on administration costs.
Mr Prescott said reform - made in the wake of the fire-fighters' strike - was long overdue.
Other proposals - outlined by MPs in a white paper - are not expected to ban firefighters from launching strike action in future.
Assembly Minister for Social Justice Edwina Hart said the announcement signalled "a further vote of confidence" by the UK Government on the success of devolution in Wales.
"Devolution of policy and funding responsibility for the fire service will end the current split in responsibility between the Welsh assembly and the Office of the Deputy Prime Minister for the three Welsh fire brigades which has made it difficult to provide effective direction to the fire service," she added.
'Confusion'
"The Office of the Deputy Prime Minister has had policy responsibility for the fire services in Wales while responsibility for funding the service has been split between the Welsh Assembly Government in terms of revenue funding and the ODPM which provides capital funding.
"The split in responsibilities has given rise to confusion, delay, uncertainty and tensions between the ODPM, assembly and fire brigades. Today's announcement will bring an end to these problems."
The announcement followed the Bain Review in December which recommended that:
The Welsh Assembly be given policy and funding responsibility for the fire service in Wales;
Responsibility for national inspection, pay bargaining and terms and conditions of service should continue to be determined on and England and Wales basis;
There should be the closest possible collaboration between the Welsh fire authorities.
As Wales has only 3 out of the 50 fire brigades in England and Wales , national inspection, pay bargaining and terms and conditions of employment of the fire service will continue to be determined on an England and Wales basis - although there is scope for local arrangements under the White Paper.
The arrangements proposed in the White Paper will encourage greater professionalism amongst staff by awarding the development of new skills. It also recognises the professionalism of retained firefighters by parity of conditions with full time fire fighters.
"The effect of the White Paper will be to create a modern and efficient fire service for the 21st century." Mrs Hart said.
Wales Office Minister Don Touhig has welcomed the proposals as "sensible step".
And he added: "I also welcome proposals to rename the Fire Service the Fire and Rescue Service as this reflects the broader role of the service, with an emphasis on preventing fire and other emergencies as well as fighting fires.
"The future Fire and Rescue Service will pay even greater attention to preventing fires happening in the first place, which in turn will save more lives and reduce injuries.
"The service will not only concern itself with fighting fires but plan for other emergencies such as environmental disasters and the growing threat of terrorism.
"I welcome the emphasis on fire prevention and education, as a way of increasing the level of protection to the public.
"This is another example of the excellent co-operation between the Government and the Assembly to improve the lives of the people of Wales."