LABOUR fears it may "fall short" of gaining an overall majority in the Welsh Assembly elections.

The party has led the opinion polls since The Senedd went into recess last month - and was recently tipped to go into government alone following yesterday's vote.

Party sources say they expect some gains and an improvement on the 26 seats it held in the last assembly - but Labour insiders admit they may not be able to surpass the "magic figure’’ of 31 needed to claim an overall majority.

First Minister Carwyn Jones, who attended the count in Bridgend, has downplayed those suggestions - saying the result is still too early to call.

Conservative sources suggested it may become the second largest party, and Plaid Cymru along with the Liberal Democrats are expected to lose seats.

The task of totting up votes got under way after the polls closed at 10pm.

However, the final figures are not expected until late this morning at the earliest.

Following a decision by returning officers, the count of votes cast in North Wales will not begin until this morning.

As a result of the March referendum, the fourth Welsh assembly will enjoy greater responsibility than ever before, wielding direct law-making powers in 20 devolved fields.

Politicians and political analysts have described the 2011 election as the most important in the assembly's history due to its new powers.

As well as assembly seats, people have also voted on whether to replace the first-past-the-post system for electing Westminster MPs with the alternative vote (AV).

Counting will start in the AV referendum at 4pm today.