The Assembly should be allowed to take out loans to build schools and hospitals instead of having to use controversial private finance schemes, the Liberal Democrats have agreed.

Currently the administration is restricted in how it can come up with the cash for major infrastructure projects, but delegates backed proposals to bring it in to line with central government.

At the party’s annual autumn conference, they voted through measures that would mean Ulster’s politicians would be given access to alternative funding streams, such as borrowing from the public sector, under a Lib Dem government at Westminster.

It would mean the Executive could look for the “best value” option for the scheme and reject the PFI method, which sees private companies provide the funds in return for lucrative long-term servicing contracts.

Treasury spokesman Jeremy Browne said Lib Dems had no “dogmatic objection” to the projects but stressed they should not be used to “cook the books”.

He said: “We, as a party, ought not, should not and do not have any dogmatic objection to PFI because PFI has in many cases — I would argue the majority of cases — proved to be successful.

“There are huge variations in terms of the value for money provided, and they need to be much better audited on behalf of the taxpayer. And they should only go ahead when it can be demonstrated that the taxpayer can get better value for money from PFI than more conventional funding bodies.”