Gradually, in 1988, a direction got a majority within the nationwide leadership that consistently sacrificed the tasks enshrined in the movement's program and the principles of democracy to the principles of “power for power”, and “power at all costs”. A part of the leadership of the nationwide movement, aknowledging the danger of that direction for Armenia and adhering to the national-democratic values of the National Movement, voluntarily left the ANM.
After the formation of the “National Democrats” faction in the Supreme Council, Vazgen Manukyan together with Davit Vardanyan, Arshak Sadoyan, Shavarsh Kocharyan, Ludvig Khachatryan, Tigran Sargsyan, Seyran Avagyan and other figures initiated the establishment of the “National Democratic Union” (NDU) uniting the active participants and supporters of the movement. The NDU was created in 1991, and Vazgen Manukyan was elected the chairman of the board of the party. The NDU had a faction in the National Assembly in 1995-2003.