The Welsh government has agreed a budget deal with Plaid Cymru, BBC Wales has been told.
Multiple sources have told the BBC that the two sides had sketched out an agreement, which should mean Labour avoids a defeat when their spending plans are put to a vote in January.
BBC Wales was told Plaid had been promised more money for health and local government. The deal is expected to be announced later.
The Welsh government has been asked for comment.
The Welsh Labour government has been in budget talks with a number of parties in recent weeks.
Labour is not able to pass the budget on its own because the party is two votes short of a majority in the Senedd.
The spending plans pay for the NHS in Wales, alongside schools, local government and other public services controlled by Cardiff-based ministers.
Plaid Cymru had pushed for more money health and councils, amid warnings the Welsh government’s existing plans for next year had left local government facing significant cuts and council tax rises.
The Welsh Conservatives had also been in talks with the government, and had called for cuts to the Welsh version of stamp duty.
Plaid did not take part in the most recent budget deal, with the Welsh Liberal Democrat Jane Dodds helping Labour ministers, in exchange for a ban on greyhound racing.
However, the party did help pass Welsh government budgets while Adam Price was leader. “This is more evidence that a vote for Plaid next year is a vote for Labour,” said a spokesperson for Reform UK.
The Welsh Conservatives said it had approached the negotiations in good faith, “but the first minister was clearly playing games”.
“Yet again, it appears that the Welsh government is set to pass a budget that falls short, thanks to another Plaid-Labour stitch up.
Among those who had been in talks with the Welsh government’s Finance Secretary, Mark Drakeford, was Lib Dem Dodds.
She said: “If this budget fails to deliver a serious social care settlement, it will be yet another year of people stuck in hospital beds who should be at home, carers pushed to breaking point, and councils struggling to keep services afloat.”
The Welsh government published its draft plans for 2026/27 in October, proposing around 2% increases to the budget.
Those plans are expected to change because the previous proposal reportedly left £230m unspent for day-to-day services. Drakeford has suggested he would be willing to give the NHS and councils more cash.
David Phillips, from the Institute of Fiscal Studies, had also previously warned of the dangers of a budget which rose by a fixed rate of inflation – with costs rising at different speeds across different services.
