Alun Michael has resigned as first secretary of the National Assembly for Wales and leader of the Labour Party in Wales.

He has been temporarily replaced by Rhodri Morgan who will be acting first secretary until a permanent replacement is announced next week.

Prime Minister Tony Blair, who had backed Mr Michael for the role of first secretary, paid him tribute for doing an "excellent job".

"He can hold his head high and be immensely proud of his achievements," he said.

Emerging from a meeting of the Wales Labour Executive to announce his second resignation of the day - that of party leader - Mr Michael said he was "very disappointed indeed".

Spitting defiance at his political enemies, he said: "I think it says very little of the integrity of Plaid Cymru that they are willing to put our Assembly at risk when they know the arguments they put forward over Objective One were wrong.

"This was not about me, but I felt that I needed to step aside in the interests of the Labour Party and of Wales."

Leader in waiting

Mr Morgan's chances of becoming the Assembly's First Secretary were boosted when Plaid Cymru leader Dafydd Wigley said his party would support his election.

Mr Wigley told BBC Radio Four's The World Tonight: "We certainly wouldn't vote against him.

"He deserves the chance to put his ideas forward and to show the direction in which he is going to lead the Assembly."

Speaking on BBC Two's Newsnight programme, Mr Morgan hinted he might seek a coalition deal with the Liberal Democrats to prevent a repeat of the no-confidence motion.

"The solution to the political instability problem is top of the agenda.

"We have got proportional representation and the high likelihood of having minority governments, and if Labour is the largest party but it doesn't have a majority, what can you do?"

Mr Michael resigned unexpectedly during a debate following the tabling of a no-confidence vote in his leadership.

No one thought he would quit until after a no-confidence vote. Even members of the cabinet were said to be "surprised".

"I resign in the interests of the Assembly and the wider Labour party," he told the chamber in Cardiff.

"It cannot be right for Plaid Cymru to choose who leads Labour nor is it right for the Conservatives and Liberal Democrats to connive with that purpose. That's why I've decided to put that choice back with the Labour party by resigning as first secretary with immediate effect."

'Blair's poodle'

Plaid tabled its no-confidence motion on Tuesday following what they regard as the failure of the first secretary to secure Treasury match-funding for £1.2bn worth of European grants.

It was carried on Wednesday by 31 votes to 27, with one abstention, that of Labour AM Alison Halford.

Rhodri Morgan, a popular MP and AM for Cardiff West, was narrowly defeated by Mr Michael in February last year in a vote to be Labour Assembly leader.

Mr Michael was Prime Minister Tony Blair's preferred candidate for the job, while Rhodri Morgan had the backing of the majority of grassroots Labour members.

Mr Michael's narrow win was only secured thanks to the use of union block votes in his favour.

That left him open to a Plaid Cymru taunt that he was "Blair's poodle", while Rhodri Morgan, by contrast, was seen as the people's choice for Labour's top job in Wales.

If Mr Morgan were to be confirmed as Labour's leader in the Assembly, it would mean that the man Tony Blair tried to stop becoming first secretary will have finally landed the job.