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Chancellor George Osborne has confirmed his backing for an M4 relief road in south Wales.

He said it was one of the most important road schemes in the UK, but denied press suggestions that the Treasury wanted to fund it from tolls.

The Welsh government has strongly dismissed the idea of imposing a toll.

Speaking on a visit to Cardiff, Mr Osborne said there was a "strong case" for the project and he was working with the Welsh government to get it built.

The Welsh government welcomed Mr Osborne's support for the scheme, but stressed that no deal had been done on paying for the road.

Plans to ease congestion on the M4 in south Wales by building a relief road around Newport were unveiled in 2004.

But ministers in the devolved administration shelved the idea in 2009 when the estimated cost rose to £1bn.

Talks have been under way recently between the UK and Welsh governments about ways to fund improvements to the M4.

Mr Osborne, speaking during a visit to Cardiff on Wednesday, said the first time he heard the suggestion that the new section of motorway could be a toll road was when it was "mis-reported" by newspapers on Tuesday.

"I hope the road is going to get built and I think there's a very strong case," he said.

"I think it's one of the most important road schemes in the whole of the United Kingdom. I think it would be of huge benefit to south Wales.

"We're working with the Welsh assembly government. I don't know where this idea of a toll road has come from.

"It's been mis-reported in the papers. It's certainly never anything I've considered, so I was reading about it in the press and couldn't work out where it had come from.

"But I'm clear we can work with the Welsh government to get the funding for this road and improve it.

"And of course it's up to the Welsh government whether they want to do any tolls, but it's certainly not something I'm asking for."

The Welsh government said a toll would be "unfair" and "unworkable".

A spokesman said: "We have been pressing for an agreed funding package for a strategic enhancement to the M4 for many months.

"It's very welcome that the chancellor has expressed support in principle and said a decision will be made on the details shortly.

"However, no deal has been done yet and we will continue to work through the important issues that remain to be resolved."

Green groups are opposed to building a relief road over the coastal Gwent Levels, but business leaders say the south Wales economy badly needs improved motorway links.

CBI Wales director Emma Watkins said: "CBI Wales is pleased to hear the chancellor's public backing for an M4 relief road.

"The CBI have long campaigned for urgent action to improve the resilience of this gateway to Wales.

"The chancellor's backing for this key economic artery is a step in the right direction. We look forward to working with the UK and Welsh governments to get a viable scheme off the ground."

Mr Osborne met parents at the Daisy Day Nursery in Llanishen, Cardiff where he highlighted UK government plans to help working families with the cost of childcare.

Couples where both parents work will be able to obtain vouchers worth up to £1,200 to help pay for childcare from 2015. But they will not be available to families where one parent stays at home.

Mr Osborne's visit came the day after he defended changes to the welfare system which have been criticised by the Labour Party, some charities and churches.

Labour said the UK government was "giving with one hand and taking with the other".

Shadow Welsh secretary Owen Smith said: "The increases in vouchers for certain families with very young children to get extra help with childcare is good, but it no way makes up for the other cuts that George Osborne has undertaken."

He accused the coalition of giving a false impression about welfare recipients, saying most people who receive housing benefit and tax credits are in work.