Senior party figures like Dafis and Wigley are involved

The group, Dewis (Choice), includes senior figures like ex-president Dafydd Wigley and former policy director Cynog Dafis.

They will urge the leadership to consider forming a coalition in the Welsh assembly to defeat Labour.

Plaid president, Dafydd Iwan, has described the idea as a potentially "huge political mistake".

Dewis is made up of five leading Plaid Cymru members, Mr Wigley, Mr Dafis, Phil Cooke, Eurfyl ap Gwilym, and Elwyn Vaughan.

They launched their manifesto for the future direction of the party on Monday in Cardiff.

On Saturday, the party decided to employ outside consultants to study the party's structure and resources following a disappointing election performance.

Mr Dafis said that Plaid should be looking to lead a Welsh Assembly Government after the 2007 elections.

The only realistic way that it could do that, he said, was by working with other parties in the assembly.

"What we are proposing is relevant to the public at large, as well as Plaid Cymru," he said.

"We're saying Plaid Cymru must take it upon itself to be the vehicle of enabling an alternative government to be established in 2007".

Mr Wigley added: "I think we're knocking on an open door with regard to the principle that Plaid Cymru must look to the possibility of coalition government existing in Cardiff Bay.

"Because of the rules, it is next to impossible for any party to get an overall majority."

Dafydd Iwan has ruled out immediate leadership change

But the party president, Mr Iwan, said that, to give the impression that the party would be willing to work with any party, just to form a government in the assembly, would be a huge political mistake.

He said the party's executive committee was unanimously against the idea of forming a coalition in Saturday's meeting.

He also noted that the timing of Dewis' launch - so soon after the General Election - could be seen by some as a sign of Plaid's weakness.

Plaid's executive met in Aberystwyth at the weekend amid calls for leadership reform.

Mr Iwan said consultants would be employed to study how the party was run but added there were no plans for leadership changes.

The party lost one of its four Westminster seats at the election, having hoped to add a fifth MP.

It failed to win Ynys Mon from Labour and Simon Thomas - MP for Ceredigion for five years - lost his seat to the Liberal Democrats.

Mr Thomas, the party's director of policy, said the party needed a single figure at the helm rather than the current system of having three different leaders.

Senior party figures like Dafis and Wigley will be involved

It is currently led by Mr Iwan, parliamentary leader Elfyn Llwyd and Ieuan Wyn Jones in the Welsh assembly.

Senior figures in the party have also called for it to work in coalition with the other opposition parties in the assembly to defeat Labour.

At the meeting of Plaid's executive committee, it was decided that the party would appoint consultants to look into the way they run the party and the way they are perceived by the public.

Mr Iwan said a full report on the plans would be produced by the autumn.

He added: "This election hasn't been a disaster by any means - we've increased our majority in three seats.

'Distinctive policies'

"But because we've lost Ceredigion and lost an MP of the calibre of Simon Thomas, we are going to ask an independent person or persons to look in depth at our structure and the way we are campaigning and the way we use our resources.

"It's a good time to look at the way we do things so we can look to the 2007 (assembly) elections with the best machine possible."

He added that the issue of the party's leadership did not receive a great deal of attention at the meeting, adding that there was no intention in the immediate future for any changes.

He also said that the party's executive committee was unanimously against any idea of forming a coalition with any other party at the assembly.

He added: "We've seen the arguments put forward but we are of one mind.

"We are going into the 2007 election as an independent party with our own distinctive platform of policies."

Plaid's disappointing performance at the general election followed on from the 2003 assembly elections, in which the party lost five of its 17 seats.