WRU chairman Gareth Davies wanted Dan Lydiate back at Dragons

Dan Lydiate has won 41 caps for Wales

Welsh Rugby Union chairman Gareth Davies says it would have "been nice" if Dan Lydiate had returned to play for Newport Gwent Dragons.

Wales flanker Lydiate, 26, reached an agreement with Racing Metro in October to move back to Wales after one season.

He is expected to join Ospreys on a dual contract with the WRU.

"It would have been nice if the principle of returning to your team of origin would have been upheld," said Davies.

Former Wales captain Davies was recently elected chairman of the WRU having previously been chief executive at the Gwent region.

Although he would have preferred Lydiate to return to Rodney Parade he says he understands the reasons for the Welsh international opting to go elsewhere.

"The important thing is that Dan Lydiate is coming back," said Davies.

"I think Dan, to be fair, met with the Dragons chairman [Martyn Hazell] a couple of weeks ago and the reason for going to the Ospreys primarily was because his wife is from west Wales.

"To be fair to her she's done the sabbatical in Paris for a couple of years and I think felt having had a baby in recent months as well, she wanted to be close to her parents and that's the sort of private decision that drove that eventuality."

Lydiate, moved to French side Racing Metro in 2013, but left Paris after failing to hold down a first-team place.

In November, it was announced Lydiate was among 12 players to be offered dual contracts by the WRU.

The creation of dual contracts was part of a £60m deal between the WRU and regions over funding and governance of the professional game in Wales.

Gareth Davies played fly-half for Wales and the British and Irish Lions before a successful career in media and commerce

The deal says players returning to Wales on dual contracts must first be offered to their region of origin - in Lydiate's case, the Dragons.

However, if the player and his region of origin cannot come to an agreement, the player is then effectively up for sale to the other three regions.

Davies said there was a limited "pot of money" of "£3.3m between the regions and Welsh Rugby Union" to "retain" as many Welsh players for the regions as possible.

He said the "Dan Lydiate scenario" is a "positive step" and "hopefully augers well for the future from relationships between the regions and the Welsh Rugby Union".

As for other deals in the offing?

"A dozen or so contracts have been sent to players, agents etc," said Davies.

"Hopefully the bulk of those will be ready to sign as soon as possible and that possibly does leave I think, some money left in the pot as it were, to hopefully extend it further down the chain and secure some more players, which will then give Warren Gatland a hard core of players not only for 2015 World Cup but in preparation for 2019 as well."