Mark Drakeford warned Wales could miss out on up to £65m to cover the increased costs of employer national insurance contributions in the public sector.

The finance secretary confirmed that Rachel Reeves, the UK chancellor, has decided to distribute national insurance funding via the Barnett formula.

“I think that she is wrong to do that,” he said.

“And I have said so in direct terms to the chief secretary of the treasury … as did the finance ministers for Scotland and Northern Ireland.

“We should have been compensated for the actual costs, not a Barnett share.”

Prof Drakeford said: “The result is that it could be as much as £65m short of what we estimate public services in Wales will have to pay.”