Labour faces a "bare knuckle fight with the Tories" at next May's assembly elections in Wales, according to Peter Hain.

Speaking at the Labour conference on Thursday, the Wales secretary said Labour's commitment to devolution had "killed Plaid Cymru's separatist fantasy".

Hain said that the biggest threat to Labour's rule in Wales came from the Conservatives who have been resurgent in the country in recent years.

"A vote for the Lib Dems or Plaid in the assembly elections could mean waking up to a Tory-led coalition on May 4," he said

"The Welsh election will be a bare knuckle fight with the Tories."

The Conservative leader in the assembly, Nick Bourne, hit back saying it had been clear for some time that "the Labour Party is on the ropes in Wales".

"Rhodri Morgan and Tony Blair are already out for the count, while Peter Hain is too busy trying to land himself a new job as Gordon Brown's deputy to be truly bothered about what happens in Wales next May," Bourne said.

A Plaid spokesman said Hain was "totally out of touch" with Welsh politics.

"A deal has already been struck between Labour and the Liberal Democrats over a coalition in the assembly between the two parties next year," he said.

At present Labour's grip on the assembly is tenuous with barely a working majority.

Rhodri regret

On Wednesday night Hain appeared at a conference fringe event where he conceded Labour had been wrong to stop Morgan leading the first Welsh Assembly Government.

After devolution in 1999 Hain was a junior Wales Office minister and ran the leadership campaign for Alun Michael, Downing Street's favoured candidate.

Hain said: "In retrospect Rhodri was the natural choice of Welsh Labour and Alun wasn't.

"I will, at some point, tell the whole story of that but I'm not going to do that now.

"I can't wriggle out of it, it did happen. Was it the wrong thing to do? Yes it was."