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Powers over policing, railways and teachers' pay could all be devolved to the Welsh government in a new deal based on Scottish devolution.
The all-party Silk Commission proposed that police and youth justice powers be handed over immediately, while other justice powers are transferred over the next 10 years.
It would be part of a move to a "reserved powers" model of devolution, currently used in Scotland, which would see Welsh ministers decide on all matters only affecting Wales.
Wales TUC general secretary Martin Mansfield said it would make devolution "more consistent, transparent and equitable" across Britain.
First Minister Carwyn Jones agreed the report "struck a workable balance between Wales and London" and argued it would secure the future of Britain.
He expressed "delight" that his Labour government would also have its powers over energy extended from projects generating 50 megawatts to 350MW.
But Plaid Cymru parliamentary leader Elfyn Llwyd said Wales "is now sadly being dragged along at an agonisingly slow pace of progress."
The lawyer said it was "frustrating" to see little progress on the creation of a Welsh legal jurisdiction and said limited energy powers left a country with vast resources unable to lift people out of fuel poverty.
The handing of control over the Wales and Borders rail franchise and teachers' pay to the Welsh government were also among 61 recommendations made by the Silk Commission.
Rail expert Paul Salverson said devolution would boost the chances of a publicly owned Welsh railway.
He told the Star that "it could only really work if you did have responsibility devolved to Wales," but warned the 1993 Railways Act would remain a barrier to full re-nationalisation.
Welsh teachers union UCAC welcomed teachers' pay plans but both the NUT and NASUWT called for the Welsh government to reject the move.
NASUWT Wales organiser Rex Phillips explained that teachers fear Wales's relatively weak economy will see them paid less than their counterparts in England.
And NUT Wales secretary David Evans warned that "we could see some of the best teachers going across the border to England" as a result.
