Wales should prepare for independence by holding a referendum to gauge views on leaving the UK before requesting an in/out vote from Westminster, according to a new report.

The independence commission, set up by Plaid Cymru, said the referendum would be used to test the views of the people of Wales by setting out constitutional options.

Its report said Wales is “already on a journey towards independence” with its own parliament and legislative powers, and that a Plaid government after the 2021 Senedd elections would complete the process.

The commission chair, former Plaid MP Elfyn Llwyd, said: “Many of our people have become aware for the first time of the positive advantages for Wales of possessing its own democratic institutions, the Senedd and Welsh Government.

“The commission believes that independence, providing much greater control of our own affairs, is the status for which Wales should aim.”

This report will play a crucial role in the national conversation on independence

The report also says fundamental improvement to the Welsh economy can only be achieved by a sovereign Wales, arguing the country’s failure to make economic progress was because it is “trapped within an economy overwhelmingly shaped in the interests of the City of London”.

It goes on to say: “There are lessons to be learned from Ireland, formerly one of the most peripheral and poorest parts of the UK. It is now a confident, self-assured independent nation, one of the richest parts of these Isles, with a seat at the United Nations.”

Following the report being published on Friday, Plaid Cymru leader Adam Price said his party would “consider its recommendations”.

He said: “Something is happening in Wales. Support for independence is at the highest it has ever been. Our nation is on the march and people are waking up to the idea that independence is possible.

“This report will play a crucial role in the national conversation on independence.”