Mr Salmond had set the SNP's sights on winning at least 40 seats and challenging for a say in government. He has managed only 35 seats and searching questions will be asked about the campaign strategy.
However the 44-year-old former oil economist is not at great risk of being deposed as party leader. Labour's vote was down 7 per cent and the Tories and Liberal Democrats gained more seats than polls suggested, mitigating the SNP's showing.
"By any standards, this result represents a huge step forward for Scotland's party," Mr Salmond said in Edinburgh. "For the first time ever, the SNP are the second party in each of Scotland's four main cities - a powerful base from which to build future progress in urban Scotland."
Mr Salmond congratulated Mr Dewar on emerging "as the largest minority in the new parliament", saying "being the Opposition was not our preferred goal in this campaign. We wanted to win the election, but oppositions have a habit of becoming governments."
He was looking forward to leading a "creative, dynamic opposition", hounding the administration on student tuition fees, financing public services and the health service.
But Mr Salmond and his advisers will first face an inquest over an election campaign which failed to impress the voters - even with a bit of stardust from Sean Connery. Though the SNP leader yesterday denied it cost votes, the "Penny for Scotland" income tax proposal is believed by some of his colleagues to have been a mistake.
Margaret Ewing, the SNP's Westminster parliamentary leader, suspected Mr Salmond's anti-Nato rhetoric over Kosovo contributed to the surprise swing to Labour in her Moray constituency - though she still won the seat for Holyrood. Moray includes the RAF bases of Kinloss and Lossiemouth.
The biggest blow for the party was its failure to win Glasgow Govan, scene of past SNP triumphs, where Nicola Sturgeon, a Salmond acolyte, appeared to have the advantage over a Labour Party still demoralised in the wake of Mohammed Sarwar's trial, and acquittal, on charges of bribery and electoral fraud.
Radicals within the new parliamentary group want Mr Salmond to restore independence to the top of the party's agenda. However with his ally Mike Russell, the party's chief executive, and other close aides all elected to the parliament thanks to the PR top-up system, Mr Salmond will have strong support for sticking with his "gradualist" approach to independence.Reuse content