Rhodri Morgan has launched a £3 million scheme to help small and medium sized welsh businesses.

The Welsh first minister unveiled a new business support scheme that will provide grants of between £5001 and £50,000 to firms investing or creating jobs in Wales.

The measure is being targeted at small and medium sized enterprises (SMEs), and those based in locations with assisted area status will be eligible for higher levels of funding.

Rhodri Morgan said the scheme was a "major step forward" in providing support for businesses in Wales.

"This is a major step forward in simplifying and integrating business support schemes in Wales with the aim of ensuring that Welsh enterprises have the best business support environment that we can provide," he said.

He added that the devolved administration was implementing its strategy of building up more "home grown" businesses to promote growth in the future.

The Welsh Development Agency will also be working with the administration on assisting businesses, and welcomed the new scheme as a "highly effective" addition to the services available.

The WDA's Sian Lloyd-Jones said: "SMEs are the backbone of the economy and all our ambitions to secure a significant improvement in Welsh prosperity depend heavily on their performance and their success."

Business representatives also looked forward to a system that would make life easier for firms seeking assistance.

"I am sure that the joined up approach we recommended will make life a good deal more straightforward for businesses seeking the right financial assistance for their needs from the public sector," said Tom Morgan of the Institute of Directors, Wales.

Funds of £3 million have been made available to support the new grant from April 1, but additional funds will be made available if demand exceeds this allocation.