THE NEW BRITAIN: Plaid exploits the Morgan effect

IT LOOKED so rosy a week ago. Labour believed it would triumph as the long march to devolution reached its end. But it was ambushed by Plaid Cymru, which pulled off a stunning coup in the Welsh Assembly election.

Led by Alun Michael, the wounded party reached base three seats short of a majority in the 60-member body, with 28 seats to the nationalists' 17, the Tories' nine and the Liberal Democrats' six.

The leadership battle following Ron Davies' "moment of madness" on Clapham Common seven months ago stoked up resentment. When Mr Michael was spun into place by Millbank, he was seen by many in Wales as Downing Street's poodle.

An opinion poll commissioned by HTV in February indicated that a party led by Rhodri Morgan, his challenger for the post, would have encouraged a higher turn-out. Plaid captured Conwy by 114 votes, Llanelli by 688 and Islwyn (Neil Kinnock's old seat) by 604 - slim majorities that a party led by Mr Morgan, the "People's Choice", might have denied to Plaid.

Indeed, Mr Morgan increased his share of the poll by 1.3 per cent in his Cardiff West seat. He was the only Labour candidate to register again, while in Valleys constituencies the rampant nationalists achieved swings of more than 35 per cent.

Nationalists are elated at their party's spectacular performance, especially its capture of the Rhondda, a constituency from which the tag "Red" was wrenched by Geraint Davies, 50, a pharmacist and local councillor. That left Labour's Wayne David looking for a job.

Mr David had been tipped as Labour leader had Mr Michael failed to make it. He stood down as a Euro MP ahead of next month's poll and now blames his defeat in Wales on an under-performing council and the smell of decay wafting up the Valley from a rubbish tip.

The 60 AMs (Assembly Members) meet for the first time on Wednesday to elect a Presiding Officer, the Assembly's equivalent to a Speaker. The claims of Lord Elis-Thomas, the only nationalist peer, are being pushed. As plain Dafydd Thomas, he was an MP for 18 years before accepting a peerage in 1992. A Marxist in his early days, the ermine and middle age - he is 52 - have remoulded him into an Establishment figure.

Labour is focusing on former music teacher Mike German, who heads the Liberal Democrats half-dozen. A Lib-Lab duet seems the only way Labour can rule, and given Thursday's low 46 per cent turn-out both parties are keen to avoid wrangling that would further undermine public confidence in the Assembly.

In the first session, which starts on 1 July, when the pounds 8bn Welsh Office budget comes under the Assembly's control, controversy over the doling out of more than pounds 1bn of European Union money to the poorest parts of Wales is likely to top the agenda.

A Tory demand that compulsory teaching of Welsh to over-14s should be dropped is likely to cause controversy, and a row is brewing over beef on the bone.