"The key for the Lions is the back-row and I think the fitness of Martyn Williams is going to be crucial," said Holmes, who won 25 caps for Wales as a scrum-half between 1978 and 1985.
"To stand up to them, we need a footballer to link backs and forwards and he has been out of this world."
Having led the way during his country's Grand Slam triumph earlier this year, Williams was again in superb form last month as Wales troubled the Springboks and All Blacks before beating the Wallabies in Cardiff. Holmes was once again impressed by what he saw from the 33-year-old who is now in line for his third successive Lions tour having also travelled to Australia and New Zealand in 2001 and 2005.
Powell joined Williams in the Welsh back row for the autumn series, making his debut in the narrow defeat to South Africa when he stood out for his ball-carrying ability and aggression around the park. If the 27-year-old can keep his discipline in pressure situations, then Holmes would be keen to see him join Williams in the starting XV for the first Test against the Boks on June 20 2009.
"I thought he was awesome in the autumn series," added Holmes.
"The only worry is a bit of discipline. That top 10 per cent, as All Black coach Graham Henry said, is so vital; that you don't give away penalties in a tight series.
"That's something he's going to have to tighten up, not just for the Lions but for the Six Nations. But his athletic ability was a joy to watch."