Welsh Secretary Peter Hain says independent MP for Blaenau Gwent Peter Law could be let back into the Labour Party, depending on how he behaves.
Peter Law left Labour to stand against their Maggie Jones
Mr Law, who left the party when he stood in protest against its policy of all-women candidates' shortlists, won the seat by 9,121 votes.
He said he might consider rejoining Labour if there was an 'amnesty' for party members who backed him.
But Mr Hain said "nobody was going to be blackmailed over this".
Mr Hain said the door back into the Labour party had not been shut to Mr Law if he votes with the party in Cardiff Bay and Westminster.
Mr Hain said Mr Law had automatically expelled himself when he stood as an independent candidate in the general election, but the party would "see how he behaves" in his dual role as AM and MP for Blaenau Gwent.
In an interview with the BBC programme Dragon's Eye, Mr Law, 57, said: "I think everything is open for discussion but I really don't think there will be any discussion for some while yet because (emotions on both sides) are inflamed."
He said he would not consider returning to the party without his supporters, former Labour party members, being given an amnesty.
Mr Law, who is also the constituency's AM, inflicted a heavy defeat on Labour's candidate, Maggie Jones, overturning a majority of 19,000.
It was the party's safest seat in Wales.
His expulsion from Labour has a knock-on effect in the Welsh assembly where the party had held 30 of the 60 seats, until Mr Law became an independent.
But Welsh Secretary Peter Hain said he was confident First Minister Rhodri Morgan would be able to conduct his assembly administration.
He told Dragon's Eye that the way Mr Law voted in the assembly would be important for his future relationship with Welsh Labour.
He said: "We never picked a fight with Peter Law, he picked a fight with the Labour Party.
"And those members of Blaenau Gwent Labour Party who joined him and supported him, they have expelled themselves and he has expelled himself."
Mr Hain campaigned for Maggie Jones in Blaenau Gwent
Mr Hain said there was no "witchhunt" against Mr Law or "vendetta" against his ex-Labour supporters.
"Let's just see how he behaves. He holds the Welsh Assembly Government Labour majority in his hands in the national assembly.
"You can't offer instant concessions but I'm not saying either that the door is being shut to Peter Law coming back into Welsh Labour, or any of those who supported him.
"But what I am saying is that nobody is going to be blackmailed over this."
On Friday morning, a Welsh Labour spokesman said: "The spotlight will be on Peter Law now, but there will be no early return for him to the party."
Mr Law withdrew from the electoral contest a month ago when he discovered he had a brain tumour, but underwent surgery and then decided to press ahead and stand as an independent.