Iain Duncan Smith has lost his job as Conservative Party leader after narrowly failing to win the backing of enough MPs in a vote of confidence.
Iain Duncan Smith bows out after his defeat
Mr Duncan Smith, opposition leader for just over two years, was backed by 75 MPs but opposed by 90.
The vote sparks the fourth Tory leadership election in eight years, with former home secretary Michael Howard emerging as the strong favourite.
One possible rival, David Davis, has already said he is backing Mr Howard in the leadership contest, saying he had decided to turn down requests to run himself.
Moderniser Tim Yeo has also decided against entering the contest, while shadow home secretary Oliver Letwin, shadow health secretary Liam Fox and former cabinet minister Stephen Dorrell all urged Mr Howard to bid for the leadership.
But Mr Howard has so far stayed silent about his next move.
Mr Duncan Smith appeared outside Conservative headquarters after the result of the vote was announced to say he would step down as leader when his successor was chosen.
He pledged his loyalty to whoever took over the helm.
"I will not publicly choose between the candidates in the coming election," he said.
"But I am going to defend the policies that my shadow cabinet have developed.
"Although I will not be the prime minister of the first Conservative government of the 21st century - I believe I have provided its policy agenda."
Nominations for the race to succeed Mr Duncan Smith will close on Thursday 6 November, with the first ballot of MPs held on Tuesday 11 November.
Nominations now open for leadership race
6 November: Nominations close
11 November: First leadership ballot of MPs
Iain Duncan Smith remains caretaker leader until successor chosen
Mr Davis said his decision to "step aside" for Mr Howard was designed to prevent more infighting.
"I recently have had a lot of people come to me and suggest I run for the leadership... enough to make me think I can win," he said.
"However, a long and protracted leadership contest would worsen these deep divisions and faction fighting and make the sort of problems we have had in recent years even worse in the run up to the next general election."
Mr Davis later told BBC Radio Five Live's Matthew Bannister programme Mr Howard would probably declare his candidature on Thursday.
He had spoken to the shadow chancellor but no deals had been done, he said.
His move is being seen as an attempt to get the party to unite around one candidate, rather than having a leadership vote among ordinary Conservative members.
In a joint statement with Mr Letwin and Mr Dorrell, Dr Fox said Mr Howard was a "political heavyweight" who could "land a few blows on Tony Blair".
Mr Howard refused to be drawn on his leadership ambitions, saying only: "My thoughts are with Iain Duncan Smith. He has shown fantastic courage and dignity."
Last ditch plea
Mr Duncan Smith's defeat came despite an impassioned appeal to his backbenchers to support him. The speech on Wednesday afternoon was described by one MP as "blazingly honest and very direct".
He urged his parliamentary colleagues to bring to a close a decade of divisions and endorse his leadership, warning there was no "white knight" to come charging to the rescue.
He said the last few weeks had been "a vision of hell" for the party.
His speech to backbenchers lasted around half-an-hour, during which he received two table-thumping and foot stamping ovations.
But it failed to win him the straight majority of the votes cast he needed to remain party leader.
The vote, which followed months of speculation about Mr Duncan Smith's future, came after the Tory leader challenged plotters to get in line or submit the 25 names they needed to trigger a ballot.
It emerged shortly after lunchtime on Tuesday that enough letters had been sent to the chairman of the Tory backbenchers' 1922 committee, Sir Michael Spicer, to force the contest.