WELSH Labour will find itself in opposition at the National Assembly in 2007, if the two main opposition parties wake up to the realities of coalition politics, claims the director of a Welsh think tank.
John Osmond says the challenge for Plaid Cymru in particular is to decide whether it wants to be in permanent opposition, or whether it wants to take the opportunity of joining a grand coalition with the Conservatives and the Liberal Democrats.
Mr Osmond, director of the Institute of Welsh Affairs, makes the case for a non-Labour coalition in a new book he has edited called Welsh Politics Come of Age.
Labour currently holds half of the Assembly's 60 seats. Mr Osmond argues there are six reasons why they are likely to do worse at the next elections in two years time:
Welsh Labour will have been in power in Wales for two terms and many voters will be looking for a change;
At the UK level, Labour will likely be mid-way through its third term with frustration and disillusion mounting;
The economic climate is unlikely to be as it was in 2003, when Labour benefited from a full term of stable growth, rising public expenditure and low interest rates;
Boundary changes in North Wales are likely to work to Labour's disadvantage, making Conwy more marginal in Plaid's favour;
In the coming general election the Tories can expect to pick up a number of seats in Wales - Monmouth, Clwyd West and perhaps Cardiff North. As a result they will be well placed to sustain the significant advance they made in the 2003 Assembly elections;
The Liberal Democrats can be expected to at least sustain their overall share of the vote while Plaid has an opportunity to recover some of the losses it suffered in 2003.
With Labour expected to be in a minority, Mr Osmond believes the Liberal Democrats would be more inclined to join a grand coalition than to support Labour, as they did for two-and-a-half years in the first term.
Welsh Conservative leader Nick Bourne, pictured above, has already signalled his willingness to consider co-operating with the other opposition parties on the basis of an agreed programme.
The main challenge faces Plaid Cymru, which still shows signs of being unable to contemplate the realistic possibility of entering a government.
Mr Osmond writes, "If presented with the opportunity following the 2007 election, can Plaid Cymru, the Welsh Conservatives and the Welsh Liberal Democrats find common cause sufficient to form a coalition administration with an agreed programme?
"If this were to happen it would represent a decisive break with the past and, indeed, a seismic shift in Welsh politics.
"The first answer to this question is that in local politics across much of Wales they have already done so ... In much of Wales the main political message emanating from the local elections was 'anything but Labour'.
"A second answer revolves around the question whether a coalition in the National Assembly could find enough common ground in policy terms.
"This should not be too difficult. The health service might seem to offer most problems, but there should be enough common purpose in addressing the waiting lists issue to satisfy the demands of one four-year term."
Mr Osmond suggests a number of areas where the opposition parties might agree:
Using the Assembly Government's large public expenditure programmes to promote private sector developments, especially in health, housing and education;
Identifying a small number of community development zones in rural Wales to check the outward migration of young people and underpin language and culture;
Investing more aggressively in a renewable energy programme;
Developing a more integrated 14-19 education programme;
Discovering a fresh approach to the problems of the Valleys, possibly promoting a development corporation;
Improving north-south communications.
Welsh Politics Come of Age (IWA, £14.99).