The Welsh Government has been accused of a rural funding fiasco after more than 3.4 million euros has had to be paid back to the EU.

The news was broken in a response to a question by Plaid Cymru’s shadow rural affairs minister Llyr Gruffydd.

Mr Gruffydd described the 'disallowance' of EU funding as a scandal and said he was shocked that rural communities were losing out as a result of the poor management of funding.

Mr Gruffydd said: "This is funding that's meant for projects in rural parts of Wales and it's down to the Welsh Government to administer the schemes fairly and correctly. This hasn't happened in a number of cases and, as a result, much-needed funding for Wales is being lost."

In her response to Mr Gruffydd's written question rural affairs minister Lesley Griffiths said: "Discussions with the EU over the issue highlighted in Audit Wales’s report are complete, with the amount of disallowance confirmed reduced from €33,140,551 to €3,412,104.

"Whilst any disallowance is disappointing, it is the reality in delivering CAP funds, as all Member States receive disallowance on many different aspects of the CAP, and Wales’ record in minimising disallowance is still one of the best in Europe.

Mr Gruffydd, who is also Plaid Cymru's North Wales regional MS, had previously questioned the rural affairs minister in the Senedd’s environment committee back in July after it emerged that the EU was looking at ‘disallowance’ of some of the £53million of Rural Development Programme funding that a Wales Audit Office report had found was awarded without competition.

The WAO report found that most of the awards made had not shown best value for money and this sparked discussions between the Welsh Government and the EU to claw back funding.

Tim Render, director for agriculture and food in the Welsh Government, responded at the time to Mr Gruffydd’s question about whether there was a risk of disallowance: “Yes, there is and we are in discussions now with the European Commission for potential level of penalties and some have been applied in previous years. So yes, there is likely to be some disallowance in light of this. It’s an ongoing negotiation process.”

In response to further questioning from Mr Gruffydd about where that money would be paid from, Mr Render said it would be “managed within the overall budget – we’ve made some provision for and factored in.”

At the time Mr Gruffydd said: “Plaid Cymru has warned all along that RDP funding needed to go to the right places and that the Welsh Government needed to ensure best value for money at all times.

"The WAO report revealed at least £53m had been awarded without competition, which is hugely worrying and begs many questions about the way this Government is funding rural projects."

Mr Gruffydd added: "The news that €3.4m is being repaid to the EU because of Welsh Government mismanagement is a scandal, especially at a time of such uncertainty for Welsh farmers and rural communities generally. It's not good enough that the minister claims that Wales has a good record of minimising disallowance. She should take responsibility for failures like this."

The Welsh Government has been contacted for comment.