Â鶹ӰÊÓ

Stephane Dion has announced he will step down as Liberal leader, ending a rocky tenure and clearing the way for a successor to take hold of the party.

Dion issued a statement on Monday outlining his plans to "step aside as Leader of the Liberal Party effective as soon as my successor is duly chosen."

He said recent political changes have forced him to reconsider his earlier decision to stay on as leader of the Liberal party until a convention scheduled for May.

"As the Governor General has granted a prorogation, it is a logical time for us Liberals to assess how we can best prepare our party to carry this fight forward," Dion said in the statement.

"There is a sense in the party, and certainly in the caucus, that given these new circumstances the new leader needs to be in place before the House resumes. I agree. I recommend this course to my party and caucus."

The House of Commons is scheduled to resume on Jan. 26, 2009.

Dion said he would offer his "unconditional and enthusiastic support" to his successor.

Later on Monday, leadership hopeful Dominic LeBlanc ended his leadership bid and threw his support behind Dion's most likely replacement, Toronto MP Michael Ignatieff.

"He is the consensus choice of Liberals to lead our party at this moment, and I want to be clear, he is also my choice," LeBlanc said at an afternoon news conference in Ottawa.

"He can bring the country together in a way that Mr. Harper never has."

The Liberals hope to have a new leader before the end of the year, so they can prepare for a possible showdown with the Tories in Parliament early next year.

If the Liberal-NDP coalition votes down the Tory budget, which will be tabled on Jan. 27, the Tories would be toppled and Canadians could get a new government or another election.

Despite rumours that Ignatieff would be installed as interim party leader, Rae said that he's still in the race to win.

"We've been whacked in two elections, we've got to make a comeback," Rae told reporters in Toronto Monday afternoon.

"I think that it's in the interest of both Mr. Ignatieff and me to have a process that's democratic," said Rae, who was joined by supporter and MP Gerard Kennedy.

Rae added that many Liberals reject the prospect that Ignatieff could be installed as leader without consulting with the party's grassroots.

"It's something that outrages people," he said. "That's a very widespread feeling."

However, Rae said he would be open to any proposals to speed up the process.

"This isn't about me, this is about what is the process that's going to help the party renew itself?"

Process may be 'accelerated'

On Sunday, Ignatieff said the Liberal caucus may "accelerate" the process to replace Dion ahead of the May convention, and warned that Harper's government will fall if it does not produce a strong budget next month.

In an interview on CTV's Question Period, Ignatieff suggested the caucus wants a new, permanent Liberal leader already in place should the opposition parties choose to vote down Harper's government when the budget is tabled on Jan. 27.

"I think there is an emerging feeling in the caucus that given the importance of this vote in late January, it would be appropriate to have a leader in place, a permanent leader in place, and I think it's fair to say that the caucus is considering various options about how to do that, to accelerate our leadership process," Ignatieff said Sunday.

Later in his interview, Ignatieff warned that Harper's government "will go down" should it fail to produce a comprehensive budget in January that offers help to Canadians in the ongoing economic crisis.

Ignatieff said the opposition party leaders should wait until they can read the Conservative budget before deciding the current government's fate.

"But Mr. Harper has to understand here that if he fails to produce a budget in the national interest of Canada, he will go down," Ignatieff said.

On Sunday night, CTV's Chief Political Correspondent Craig Oliver reported that Ignatieff basically had the race in the bag, and it was just a question of when he would take over.

"Michael Ignatieff pretty much has this leadership race wrapped up," Oliver told Â鶹ӰÊÓnet Sunday evening.

Oliver said the Liberal caucus is set to meet on Wednesday and is likely to vote to make Ignatieff their parliamentary leader, which would put immense pressure on Rae to drop out.