Peter Hain said the present system did not seem sensible
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The UK Government is considering a review of the way Welsh Assembly Members are elected.
Secretary of State for Wales Peter Hain said the proportional voting system used for one third of the seats in the assembly can produce unfair results.
He says it is wrong that would-be AMs are able to stand and lose in individual constituencies, only to re-emerge as elected AMs under the regional list system.
However, possible changes to the system are unpopular among opposition AMs.
Mr Hain said he will wait until the Richard Commission - set up to investigate effectiveness of the assembly - publishes its report before announcing whether an independent inquiry is needed.
Out of the 60 assembly members, 40 are elected from constituencies, in the same way as MPs are.
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What I am wanting to do is to reserve the right to review the operation of the election system
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The remainder are chosen from regional party lists.
This can produce unusual results - in Clwyd West, three defeated candidates still won assembly seats.
"It doesn't seem to be a sensible way of proceeding," said Mr Hain.
"I don't want to change the system to make it unfair to other parties.
"The only changes that were brought in would have to have broad consent.
"What I am wanting to do is to reserve the right to review the operation of the election system."
But the Tory leader in the Welsh assembly Nick Bourne said changing the system was "a very dangerous road to go down".
Tory leader Nick Bourne said changes could be dangerous
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"This is about politicians interfereing with electoral systems - I would remind Peter Hain one of the most distinguished regional members who got in on the list was Alun Michael."
Meanwhile, Eleanor Burnham, regional Lib Dem AM for north Wales, defended the regional set-up, saying that, if it did not exist, there would be no conservatives in the assembly.
"Is that fair for all the people who voted tory - I don't think so, and I'm not even a tory!," she said.
Scottish devolution
More than half the Welsh Labour MPs have called for changes.
Labour's Wrexham MP Ian Lucas agreed the current "flawed system" needed to be reviewed.
"Constituents of mine simply cannot understand how a loser in an election subsequently becomes a winner," he said.
He supported the idea that candidates could only stand either as a regional AM or a constituency AM.
The announcement mirrors a similar initiative in Scotland where the number of Scottish MPs at Westminster is being reduced due to devolution.
Mr Hain has made it clear that the number of Welsh MPs would remain the same.
In January, Mr Hain told a constitutional lecture in London members elected under the regional list system could face calls to cut their staffing and expenses.