PRIME Minister Gordon Brown said today he intended to stand down as Labour leader.
The PM said that Liberal Democrat leader Nick Clegg had just told him he wanted to take forward formal talks with the Labour Party.
Mr Brown said he would ask the Labour Party to set in train the processes for a leadership election and he would not be standing.
Mr Brown says he has "no desire to stay in my position longer than is needed to ensure that the path to economic growth is secured" and the route is paved for political reform.
He says he will ask his party to launch a leadership contest and will play no part in it - expecting a new leader to be in place around the time of the Labour conference in September.
He also said he was to press ahead with "formal discussions" with the Liberal Democrats after the request from Mr Clegg.
In a statement in Downing Street, Mr Brown said it was "sensible and in the national interest" to respond positively to the request.
He said the Cabinet would meet soon and a "formal policy negotiation process" would be established.