Morgan still to quit in autumn

Rhodri Morgan also backed UK government action on the banking system

First Minister Rhodri Morgan has said the economic downturn will not affect his decision to stand down in the autumn.

He told the BBC Politics Show that by later this year the Welsh assembly government would have everything in place to tackle the recession.

Mr Morgan was asked whether he still intended to stand down on or around his 70th birthday in September.

There has already been speculation over his successor as Welsh Labour leader.

Asked about his plan to step down in the autumn, he replied: "Yes that's my intention - I think by the autumn, everything that we could possibly do to try to shorten the recession, or make the recession shallower, will have been put in place.

"That's not to say that the recession will have come to an end but all the machinery of government will have been put in place.

Carwyn Jones is seen as a front runner to succeed Rhodri Morgan

"And will have a much better impression of whether President Obama's arrival has restored confidence to the US economy - the big swing economy - and we'll have a pretty clear picture of the way forward by then".

Mr Morgan has previously said he would stand down around his birthday on 29 September, unless the calling of a general election by Gordon Brown forced him to delay his plans.

There has been much speculation about who will take over.

Rhondda assembly member Leighton Andrews ruled himself out of the running for top job before Christmas.

But earlier this month Carwyn Jones - the Bridgend AM and Counsel General in the assembly government cabinet - gave his strongest indication yet that he plans to run for leader of the party in Wales.

Mr Jones told party supporters that Labour needed a new narrative and focus on the future, rather than the past.

He also said that Wales needed the "Calzaghe spirit" where it was punching above its weight in the world.

'Very precarious'

Speaking in Llanelli, Mr Jones did not formally declare that he was a candidate for the party leadership, but the breadth of the speech, both in terms of Welsh Labour and the future of Wales, left few in any doubt that he intends to mount a bid.

Mr Morgan told The Politics Show that it was important that workers and companies in trouble did their best to take up the training packages and opportunities that the assembly government were offering.

He said that the economy was in "a pretty serious situation" but that people should not "overdo the negativity".

He also backed the moves that the UK government were taking on the banking system.

Mr Morgan rejected claims from the Liberal Democrat's Treasury spokesman, Vince Cable MP, that the UK government was not being tough enough with the banks.

"Well, that's a good popular thing to say to win votes but that might prejudice what is a very precarious edifice," he said.

"Our banks are in a very precarious position at the moment - and [you have to be careful] on making judgements on how far you can push them on freeing up the credit. These are really matters for Treasury civil servants who are burning the midnight oil along with [the Chancellor] Alistair Darling".