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Labour-Plaid coalition 'on cards' Labour-Plaid coalition 'on cards'
(20 minutes later)
Plaid Cymru is likely to enter formal talks on forming a coalition Welsh Assembly Government with Labour, BBC Wales has learned.Plaid Cymru is likely to enter formal talks on forming a coalition Welsh Assembly Government with Labour, BBC Wales has learned.
A senior Plaid source told the BBC that the party had received an offer that would be very difficult to refuse.A senior Plaid source told the BBC that the party had received an offer that would be very difficult to refuse.
It is understood Labour has offered Plaid a minimum of three cabinet seats and a guarantee of a referendum on full powers for the assembly.It is understood Labour has offered Plaid a minimum of three cabinet seats and a guarantee of a referendum on full powers for the assembly.
The Plaid Cymru group will meet on Tuesday night to discuss the offer. The Plaid AMs' group will meet on Tuesday night to discuss the offer.
One senior party member told the BBC that it was an "odds-on certainty" that the group would support further discussion.One senior party member told the BBC that it was an "odds-on certainty" that the group would support further discussion.
The development is the latest in a series of twists and turns in Cardiff Bay since the 3 May election left Labour the largest party, but five seats short of a majority.
Rhodri Morgan was installed as first minister leading a minority administration just over two weeks ago.
Plaid's decision to enter serious talks with Mr Morgan has come as a shock to the Conservatives and Liberal Democrats.
They believed Plaid favoured forming a so-called "rainbow coalition" administration with them.
First Minister Rhodri Morgan may have to share power with Plaid
This view appeared to have been reinforced on Monday night when Plaid leader Ieuan Wyn Jones effectively rejected overtures for co-operation from Labour.
Mr Morgan wrote to Plaid and the Liberal Democrats last week.
He offered an inquiry into the way the Welsh assembly is funded, a temporary halt to changes to hospital services and a group to examine the conditions for a referendum on assembly powers.
Mr Jones demanded a better offer from Mr Morgan and it appears he has received one.
Plaid Cymru's national council is due to meet on 7 July in Aberystwyth to discuss whether or not it endorses the proposal for a coalition between itself, Lib Dems and Conservatives.