Peter Kilfoyle, the public service minister, said that he had issued guidance to civil servants stressing they should abide by the Civil Service code, and maintain the political impartiality of the Civil Service.
They were told to ensure that public resources are not used for party political purposes. A total of pounds 700,000 has been allocated to a public information campaign on devolution.
The guidance highlights the fears by the "no" campaign, which was launched in Wales yesterday, that the Government will use the Civil Service to ensure a "yes" vote in both referendums.
The launch at a hotel on the outskirts of Cardiff included a supportive message from Viscount Tonypandy, the 88-year-old former Speaker of the House of Commons, which was delivered via a video link.
The campaign is being funded by the millionaire Sir Julian Hodge from his home in Jersey. His son, Robert, is leading the "no" team. Claiming that Wales was too immature to stand on its own feet, Mr Hodge, declared: "We don't have North Sea oil and we don't have our own banking system. A Welsh assembly would just be another tier of bureaucracy. People should vote with their heads, not their hearts."
The Government was defeated for a third time in the Lords yesterday on the proposal that Scottish Parliament's tax-varying powers should be limited to income tax.
Peers voted by149 to 132 - a majority of 17 - for a Tory amendment to the Referendums (Scotland and Wales) Bill requiring this to be spelt out on the ballot paper for the devolution referendum north of the border this autumn.
Ministers have promised that limiting the tax-varying powers to income tax will be made clear in a devolution Bill to follow endorsement of the devolution plans for Scotland in the 11 September referendum.
But in the detailed report stage debate on the referendums Bill, Conservative peers, led by the frontbencher Lord Mackay of Ardbrecknish, voted to have it spelt out in the questions on the Scottish referendum ballot paper. The Government is expected to overturn the Lords defeat by using its massive majority in the Commons.
William Hague, the Tory party leader, will pin his colours to the mast of the Welsh "no" campaign today at the Royal Welsh Show to coincide with the publication of the White Paper, A Voice For Wales, which will be unveiled in the Commons this afternoon by Ron Davies, the Secretary of State for Wales.
Labour says it is heartened by a private poll which shows a growth in support for devolution. Of 1,500 voters questioned, 35 per cent favoured an assembly, with 25 per cent opposed. When the "don't knows" - 40 per cent - were pressed, the "yes" vote increased to 49.8 per cent, while the "no" vote rose to 27 per cent.
Peter Hain, the Welsh Office minister co-ordinating the devolution drive, said: "I am confident we will win decisively."
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