Scotland's seven Green MSPs are set to enter into an informal "traffic light" pact with Labour and the Lib Dems.

Following the loss of six Labour seats in Thursday's Holyrood elections, first minister Jack McConnell is said to be deeply worried about the prospects of governing with a slender Labour/Lib Dem majority.

In what will be seen by some as a panic move, McConnell is seeking to form a pact with the seven-strong Scottish Green group.

Whilst the Greens will be given no ministerial portfolios, they would sit down annually with the government to provide their input into the legislative agenda.

The move comes amid heightened fears that the Scottish Socialists - who secured six seats in the parliament - will attempt to destabilise McConell's business programme.

Labour's high command fears that a coalition of nationalists, socialists and Labour left-wingers could unite to defeat the executive's health, education and law and order reforms.

McConnell is said to believe that Labour and the Greens have enough common ground to strike a relationship.

The Lib Dems meanwhile appear set to secure an additional Cabinet seat and are demanding proportional representation for Scottish local government as their coalition price-tag.

McConnell and Lib Dem leader Jim Wallace are expected to continute behind the scenes horse-trading before announcing a formal deal later this week.

Speaking on Saturday the first minister said Labour's focus would have to change following the strong vote for small parties and independents in the election.

He said Scottish politics was "entering a new political era".

"For too long, Scottish politics has been a battle for control and power. Once between Labour and the Tories, more recently between Labour and the nationalists," he said.

"That contest has changed and we must change with it. "The contest is no longer just about a contest for votes.

"Labour must change to win the battle of ideas and the contest for public opinion."