Welsh Secretary Peter Hain is understood to be "leaning towards" a single police force for Wales.
A radical shake-up of policing recommends that forces merge
But he has ruled out the prospect of bringing any new, Wales-wide force under assembly government control.
Last month a report said the current structure of 43 police forces in Wales and England was "no longer fit".
Mr Hain ruled out merging any of Wales' four police forces with those across the border, but said that change in the policing structure was inevitable.
The Inspectorate of Constabulary report, published in September, recommended mergers to create 30 larger forces.
In Welsh terms, only South Wales Police comes close to the preferred minimum size of 4,000 officers.
North Wales is resisting the prospect of a single Welsh force
The report argued that larger forces perform best at challenges facing police in 21st Century such as people-smuggling and international terrorism. It also claimed that reorganisation would save more than £2.5bn.
Mr Hain had been asked for his views by Home Secretary Charles Clarke. Mr Clarke has said he will consider the report carefully before giving a response, while Mr Hain said he would soon make an announcement on his own detailed views.
He said: "Policing is a reserved matter so as Secretary of State for Wales I am in the lead on that as far as Wales is concerned."
The Police Federation has already said it accepted the number of forces was likely to be cut from the current 43.
The report argued forces below a certain size could not respond effectively, while the bigger forces tended to be better at tackling terrorists, and dealing with serious and organised crime.
A large force is defined as one with more than 4,000 officers. Wales' largest forces is South Wales Police with fewer than 3,500 officers, while none of the other three has more than 2,000 each.
Creating a force that had over 4,000 officers in Wales could mean a merger of Gwent, Dyfed-Powys and North Wales Police.
Senior North Wales Police officers have said they would be against any possible merger, claiming the force already shares facilities such as helicopters and diving units with the Cheshire force.