The Welsh Liberal Democrats are holding informal talks with Labour about forming a coalition government, according to the party's Welsh leader.
Mike German will go to his executive 'if it's worth it'
Lembit Opik MP told BBC Wales that the Lib Dem assembly leader Mike German has held informal talks with Rhodri Morgan.
A Lib Dem spokesman said there had been "no meaningful talks" in recent days while Mr Morgan's spokesman said there had been no further discussions.
Mr Opik said any formal talks would need the party's executive permission.
He told BBC Wales' Politics Show that Mr German should seriously consider making that request if Labour shows signs of agreeing to demands made by the Lib Dems.
"He should do if he really thinks it serves the interests of the Liberal Democrats agenda well," Mr Opik told the programme.
In touch - Lembit Opik said he was in regular contact with Mike German
"Of course, that's a judgement call for Mike. He'll go to the executive if he thinks it's worth it, on matters such as local government PR and things like that.
"He'll say to the the executive 'this is looking good, what do you think, will you give me permission to formalise that?'"
"But there's no guarantee the executive will be comfortable with that."
However, later a spokesperson for Mr Morgan said: "The Liberal Democrats suspended discussions with Labour last month and apart from an exchange of letters between the First Minister and all opposition party leaders there have been no further discussions with the Liberal Democrat party."
A Liberal Democrat spokesperson added: "There haven't been any discussions with Rhodri Morgan over the last 10 days or so.
"Of course people talk informally in corridors but there have been no meaningful talks."
First Minister Rhodri Morgan is currently heading a minority Welsh Assembly Government, after Labour was left five seats short of a majority in the 3 May election.
Last week, he was urged by Labour MPs to resume talks with the Liberal Democrats on forming a coalition.
He met Welsh Labour MPs amid their growing unease about the prospect of a deal with Plaid Cymru.
However, Labour's MP for Newport West Paul Flynn said a Labour-Plaid coalition government in the assembly was the best way forward for Wales.
He said if had been mistakenly reported that all of the Welsh group of MPs wanted a deal with the Liberal Democrats.
But he writes on his website that the Lib Dems were hopelessly divided and their insistence on proportional representation for local government would be a step too far for most Labour councillors.
Mr Flynn says a deal with Plaid would be the most stable and progressive way forward for Wales.
And he says the reason many MPs are opposed to it is because they are "anti-devolution."