Mr Hain said that Labour voters would not turn out unless the party "gets its act together" in the wake of the contest between Alun Michael, the Welsh Secretary, and the backbencher Rhodri Morgan.
In an attempt to end the acrimony that has characterised the three-month race, Mr Hain revealed that, win or lose, Mr Morgan would be offered a "major role" in Labour's campaign to win the Assembly election on 6 May.
As the Morgan and Michael camps put in their final efforts before the leadership ballot ends tomorrow, Mr Hain said he was confident that the Welsh Secretary would win "but it will not be by a mile".
The result, which will be announced on Saturday, is expected to be extremely close as an electoral college of trade unions, MPs and assembly candidates decides who will stand for the first "Prime Minister of Wales".
Mr Hain poured scorn onspeculation that Mr Morgan could stage a GLC-style "coup" to become First Secretary if he lost the leadership contest. Under this scenario, Labour rebels would team up with nationalists to elect him despite Downing Street's wishes. "I would rule that out 300 per cent. There's not a cat in hell's chance of that happening. The Wales Labour Party is a very self-disciplined party. Wales post-May 1999 is not London post-May 1981," he said.
However, Mr Hain claimed that the events of the past year had resulted in the "biggest crisis in its modern history" for the Wales Labour Party. Morale had to be restored after rows over twinning constituencies, MEP selection and the resignation of Ron Davies.
"I think we will need to do a lot of work in rebuilding morale and confidence in the grass roots of the part because that has been battered over the past year in Wales."Reuse content