Plans for a “rainbow coalition” to run Wales have fallen apart after the Welsh Liberal Democrats’ ruling body vetoed the move days before it was due to take control.

Plaid Cymru and the Conservatives were left fuming after the Liberal Democrats, the smallest group in the proposed coalition, caused astonishment by turning the agreed policy document down.

With the plans of the three opposition parties in disarray, Labour moved to seize the initiative amid signs they would stay in power to run Wales with a minority administration.

Labour asked the Presiding Officer to move forward the date of a plenary session of the assembly to nominate the First Minister, from Tuesday next week to tomorrow.

With Plaid Cymru assembly members expected to abstain, Labour AMs would be able to return Rhodri Morgan - the man who 24 hours ago looked to be heading for opposition - to the post of First Minister.

There was widespread condemnation of the decision by the Liberal Democrats, who traditionally have been the greatest advocates of coalition governments and helped to secure a voting system for the assembly that almost guaranteed that no party would have an absolute majority.

At a meeting in Llandrindod Wells, Mid Wales yesterday evening the Lib Dems’ negotiating team backed the policy programme agreed with Plaid and the Tories by five votes to three. The Lib Dem assembly members then supported it by four votes to two.

But the Welsh party’s national executive was split, with nine in favour and nine against. Since the party’s rules required a majority vote from all three groups, with no provision for a casting vote in the event of a tie, the deal was scrapped.

In another vote, the Lib Dems’ assembly group unanimously decided not to reopen coalition talks with Labour, which the same national executive voted to suspend last week.

Plans for a special conference of 150-200 Lib Dem representatives to vote on the coalition plan, which was again due to take place in Llandrindod Wells on Saturday, were abandoned. There were moves by grassroots Lib Dems to recall the special conference, by gathering a petition of at least 20 members in favour, but if Mr Morgan is nominated as First Minister on Friday it would be too late.

Mike German, leader of the Lib Dems’ assembly group, admitted: “It is clear that the party is divided. The vote in the National Executive was split, and we needed a majority to proceed to a Special Conference.

“Unfortunately there wasn’t sufficient support to take the deal forward. The Assembly group will now provide a good and robust opposition in this Assembly.”

But Ieuan Wyn Jones, the Welsh nationalist group leader and man who would have led the coalition as First Minister, said: “The Lib Dems don’t have any short-term credibility because they have thrown away the chance of saving their local hospitals.

“When their local schools close or hospital closes or services are taken away, they can’t really protest because they have thrown away the opportunity of saving them.”

Nick Bourne, leader of the Welsh Conservatives, said: “The people of Wales voted Labour out. Liberal Democrat members have voted them back in.

“Liberal Democrats have shown that they lack the courage, vision and ambition to deliver what is best for Wales.

"People across Wales will feel betrayed and deeply let down by this decision. Whenever Labour closes a hospital or withdraws local NHS services in Wales, it will be because the Liberal Democrats failed to put the people of Wales first.”

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