And even if he secures Labour's nomination, Mr Michael has yet another hurdle to surmount.
But last year Mr Michael was replaced as first minister by the popular Rhodri Morgan.
Mr Lloyd and Mr Michael have both been MPs for more than 25 years.
Being selected for a winnable seat may prove as problematic for Mr Michael as being elected leader.
In the battle neither party wants to win, Mr Michael must be hoping for victory through defeat.
Mr Michael is a former Welsh secretary, ex-Home Office minister and was the Welsh assembly's first leader.
"Plaid Cymru's policies are hostile to business, backward and inward looking, damaging to Wales' economy, " Mr Michael said.
In Mid and West Wales, where Mr Michael heads his party list, Labour already has three safe seats.
Unusually, said BBC correspondent Graeme McLagan, Judge Mr Michael Hyam did not commend officers who worked on the case.
Earlier, Mr Michael said much of the criticism of the bill was misplaced.
Mr Michael also said he was confident of seeing off the legal challenge.
Labour, said Mr Michael, aimed to support business, not hinder it, which is vital to the prosperity of Wales.
Former Welsh Secretary Mr Michael, who was first elected in 1987, is a candidate for the South Wales area.
Mr Michael can only become a member if Labour loses the marginal Carmarthen East and Dinefwr to Plaid Cymru.
Pressure from other Labour members dissuaded Mr Michael from offering Mr Davies a cabinet seat as a gesture of reconciliation.
After joining the Home Office, Mr Michael followed Home Secretary Jack Straw in taking a tough line on burglars and paedophiles.
BBC: News | UK Politics | Alun Michael: The new Welsh Secretary
The snag is that even the electoral college system that secured Mr Davies's victory might not work for Millbank's Mr Michael.
Mr Morgan's supporters say the task-force is stalling, as it struggles to devise a system which guarantees Mr Michael a win.
Mr Michael cannot campaign openly against his own party, and has even put in a few token appearances in the constituency.
During his statement, Mr Michael did not produce detailed proposals, but he did set out "cruelty and utility" as guiding principles.
Mr Michael and his wife Mary have two sons and three daughers.
BBC: News | UK Politics | Alun Michael: The new Welsh Secretary
Mr Michael claims, with justification, that he can scrape together enough matching funds to qualify for euro-subsidies in the coming financial year.
Mr Michael said it would protect roles and to avoid further cuts.
Although Mr Michael was ousted last year and Mr Morgan is now first minister in the Welsh Assembly, the memory still smarts.
No one in Cardiff expects Mr Michael to be able to come up with the extra money in time to avert the deadline.
Mr Michael has survived so far because of the inability of Plaid Cymru, the Tories and the Liberal Democrats to make common cause.
Before the Davies affair, Mr Michael was happily focused on a political career at Westminster, and had not applied for an assembly seat.
Mr Michael cannot lead the Welsh Assembly without being a member of it, so his only chance was to win a top-up seat.
But such fiscal rectitude is of little help to Mr Michael, who risks being voted down for failing to win the battle with Whitehall.
The presiding officer of the 60-member National Assembly cannot vote in a no-confidence motion, leaving Mr Michael with 28 votes to his opponents' 31.
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