The all-party committee will oversee the work of Rhodri Morgan, economic development chief. Mr Davies, who resigned as Welsh Secretary and party leader in Wales after his walk on Clapham Common last October, defeated Mr Morgan in the first of two partyleadership contests.
The victor in the second round was Alun Michael, whose blackballing of Mr Davies from the eight-strong cabinet led to uproar when the Assembly met for the first time on Wednesday.
In a statement following his appointment yesterday Mr Davies, who is widely regarded as the architect of devolution in Wales, reiterated his disappointment at failing to be selected for a cabinet post. He added: "I have long argued the case for spreading economic prosperity throughout Wales."
Plaid Cymru yesterday deferred naming its shadow cabinet. The party holds 17 of the 60 seats. The selection process has been agreed but the list would not be finalised this week.
Three Plaid Cymru MPs are also Assembly members - Dafydd Wigley, the party leader, Ieuan Wyn Jones and Cynog Dafis, both of whom are expected to be appointed to shadow cabinet posts. They will be in place next week for the first Welsh Question Time.
The Queen, accompanied by Prince Philip and the Prince of Wales, will travel to Cardiff to open the Assembly on 26 May. The body starts work on 1 July when it takes control of the pounds 8bn Welsh Office budget.