Gordon Brown has said he is stepping down as Labour Party leader
First Minister Carwyn Jones says Gordon Brown is to be "admired" over his move to step down as Labour Party leader.
Mr Jones, Labour's leader in Wales, said his "selfless" announcement "speaks volumes about the man".
Plaid Cymru's parliamentary leader Elfyn Llwyd said Mr Brown had "done the decent thing".
But Conservative AM for Cardiff North Jonathan Morgan said Mr Brown was "deluded and arrogant" and accused him of indulging in "fantasy politics".
Mr Brown has announced that is stepping down as Labour Party leader.
His statement will be seen as a move to smooth the way to a deal between Labour and the Liberal Democrats to form a government.
Mr Jones said: "There have clearly been significant problems with the negotiations that have taken place between the Tories and Liberal Democrats, in arriving at an agreement.
Carwyn Jones said Mr Brown had put 'the interests of the country first'
"Nick Clegg has now instead requested formal negotiations with the Labour Party, with a view to exploring an alternative way forward, and this is patently an important development.
"The Labour Party will engage with utmost sincerity and determination at these negotiations to seek a successful outcome.
"The fact that Gordon Brown is selflessly putting the interests of the country first at this crucial juncture, speaks volumes about the man - as both leader of our country and our party.
"For this he can only be admired.
"It will be crucial that any new government protects Wales from the brunt of excessive spending cuts."
However, Mr Morgan said: "I think Gordon Brown is more deluded and arrogant than I realised if he thinks that the British people will allow him to carry on in the short term as prime minister and then allow him to hand over to another Labour leader who becomes prime minister without facing a vote by the public.
"I think this really is fantasy politics.
"We need strong and stable government and there's only one way for that to happen and that's for David Cameron to lead a government with the support of the Liberal Democrats and that will provide the certainty that Britain needs."
Former Liberal Democrat Montgomeryshire MP Lembit Opik described Mr Brown's decision as "magnanimous".
He said: "Gordon Brown had to go. It was matter of timing. He was a caretaker prime minister but that's fair enough and we all knew that really, so it's not a dramatic piece of news.
"What's very interesting about this is that it could open up further dialogue between the Lib Dems and Labour.
'Loud and clear'
"And I'm pretty sure that's why they've timed it as they have because it actually could mean that the very complicated rainbow alliance that could happen goes back on the agenda if the electoral reform requirements aren't met by the Tories."
Mr Llwyd said: "As time [went] by, [Mr Brown's] position became more untenable, more difficult, and I think he has done the right thing today.
"It was clear that he had no mandate from the people to maintain his position in Downing Street, and he has now shown that he has heard that message loud and clear.
"Mr Brown's announcement is a signal to other progressive parties that Labour is willing to talk in order to explore the possibility of establishing a progressive alliance to govern in Westminster."