PLAID Cymru leader Ieuan Wyn Jones will hold talks with Labour over a formal coalition deal to run the Assembly government.
First minister Rhodri Morgan offered enough prospects of more last-ditch concessions on policy to tempt Mr Jones into further discussions and hold out a slender lifeline for the minority Labour administration.
But the Ynys Mon AM insisted that the Rainbow Alliance with the Conservatives and Lib Dems and a Plaid-led government also remained on the cards and was not withdrawn.
Mr Jones said: “Labour has asked us to consider a number of other issues which weren’t on the table previously.
“In order to make it clear to the people of Wales that we want the best deal possible for them, we are prepared to consider what Labour is offering.
“Anything that Labour offer has to be substantially better than what we have in the All-Wales Accord (rainbow deal).”
He refused to say if a referendum on Scottish-style powers for the Assembly was part of a proposed deal, but denied that Mr Morgan had dangled up to three cabinet posts in front of him.
“The issues are interesting enough for the (Plaid) group to think it’s worth looking at them. All we are doing is exploring the options.
“I need to be satisfied that any agreement I put to the party has to be in the best interests of the people of Wales and the best form of governance for the people of Wales. I have a duty to the party that offers them the best chance and we have considered all the options.”
Mr Morgan’s spokesperson said that the first minister would be in touch with Mr Jones in the morning to discuss setting an agenda, a timetable and identifying negotiating teams.
Tory Assembly leader Nick Bourne said: "This development does not come as a surprise.
"We always knew there would be more twists and turns in efforts to secure a stable, majority government in the National Assembly.
"We also know that Rhodri Morgan and his Labour colleagues will do and say anything to hang on to power.
"The people of Wales rejected Labour on May 3. Voters sent a clear message last month that they do not want them in power for another four years.
"Our position remains unchanged. We think Wales will be best served by a non-Labour alternative."
