Pembrokeshire looks set to be swallowed up the return of a Dyfed-style authority after the Welsh Government set out its plans for local council mergers.

Cutting the number of Welsh councils from 22 to eight or nine could save up to £650 million over 10 years, the Government claims.

The Draft Local Government (Wales) Bill sets out how significant savings can be made in order to protect frontline services.

Under the Bill, the current 22 councils will be merged, bringing back arrangements similar to re-organisation in 1996.

Under the options Pembrokeshire County Council will be merged with Ceredigion and Carmarthenshire.

It is anticipated that the mergers would pay for themselves within two to three years, and the £650 million savings figure takes into account all initial costs.

Additional savings could also be achieved by the sale of surplus assets, the Government says.

The Draft Bill is the start of a formal consultation process on the proposals for local authority mergers announced in June.

The consultation closes on February 15 next year.

The Public Services Minister, Leighton Andrews said: “This Draft Bill sets out a programme of reform to secure the future of Local Government in Wales. We want to see councils which are vibrant, strong, flexible, open and transparent - councils with vision, great leadership and passion, working effectively with the public service workforce and their communities to improve services, improve lives and improve places.

“There is a real opportunity here for Local Government to make significant savings for taxpayers and if councils work together, plan well and involve their staff there is the opportunity for savings even greater than the £650 million we have identified. This means more money for front line public services, more money to invest in communities and more money to support local economic prosperity.”