From BBC News:
An escalating row over funding is threatening to delay a major upgrade of the Great Western main line between Swansea and London.
The dispute is over who pays for a separate electrification of railway lines in the south Wales valleys.
Welsh Secretary David Jones said documents proved the Welsh government agreed to pay for the valley lines upgrade.
But the First Minister said the UK government should foot the bill.
Carwyn Jones insisted that ministers in Westminster had said they would do so.
The Welsh secretary said the dispute was having knock-on effects over electrifying the mainline to Swansea.
Leaked correspondence between both administrations showed they agreed a funding package in 2012.
As part of the deal, the upgrade to the valley lines – the commuter lines in and out of Cardiff – would be paid for from the access charges that train operators pay to use the track.
The service is currently operated by Arriva Trains Wales, subsidised by the Welsh government. The franchise is due for renewal in 2018.
Welsh government sources said they agreed a “mechanism” to cover the cost of electrification, but that the UK government should pick up the bill.
Electrification to Swansea and the valleys was announced at a cost of £350m in 2012 by the UK government, although it now says the current estimate for the cost for infrastructure on the valley lines is £588m.
Welsh Secretary Mr Jones said: “There’s a complete audit trail of the negotiations between the Welsh government and Department for Transport which makes it absolutely clear that the Welsh government would be responsible for paying for the valleys lines.”
He said the UK government would pay for the upgrade on the main line between London and Cardiff, and between Bridgend and Swansea.
“We’re very anxious to adhere to that bargain and we do look to the Welsh government to pay its part of the bargain too,” he added.
A delay over the valley lines – including the section of the main line between Cardiff and Bridgend – was “causing problems over the upgrade of the route to Swansea”, he said.
In an interview in October 2013, Prime Minister David Cameron said: “It’s this government that’s putting the money into the electrification of the railway line all the way up to Swansea and, of course, the valley lines.”
But the Welsh secretary said: “The Welsh government can’t deny what the arrangement was.
“It’s documented in black and white, and all that they need to do now is to come to terms with the HM government for the upgrade of that line.”
A Welsh government spokesman said: “The Welsh government has never agreed to fund the electrification of the valley lines because rail infrastructure is not devolved.
“However, the prime minister has publicly stated on a number of occasions that the UK government would fund this important project.
“If the secretary of state for Wales has any correspondence that suggests otherwise then we call on him to make it public.”
Network Rail will raise the money for the work on the valley lines itself initially, then recover it from the access charges.
However, its strategic business plan for 2014-19 also says the Welsh government will pay £28m in “financing costs”.
A Network Rail spokeswoman said: “To progress to the next step and meet the regulatory commitment of delivering the scheme by 2019, we need confirmation that the funding for the project is secured.”
BBC Wales has also seen a record of a meeting between officials from Cardiff and Whitehall in March 2013.
They discussed an arrangement whereby the Welsh government would pay to electrify the valley lines.
It is not clear whether the arrangement was approved by Welsh ministers. The Welsh government has been asked to comment.
The arrangement would involve the Department for Transport (DfT) providing the funding between 2014 – 19 because “WG have no money” to pay for the enhancement.
The DfT would then “get this back from WG” in the future and be “left revenue neutral as WG will pay for the full cost of the work”.
In a letter to the first minister on 14 March, Mr Cameron accuses Welsh ministers of “misunderstanding” the funding deal.