Liberal Democrat home affairs spokesman Mark Oaten has declared he will stand for the leadership, saying he wants to take the party back into power.
Mr Oaten said he felt 'very buoyed' by support from party members
Mr Oaten, 41, said he wanted to make the Lib Dems a "truly modern 21st century party" by making their principles relevant to today's voters.
The only other candidate so far is Sir Menzies Campbell, the acting leader after Charles Kennedy's resignation.
Party president Simon Hughes is also thought likely to stand.
Sir Menzies, 64, is believed to have the backing of more than a third of the party's 62 MPs and he has been endorsed by former leaders Lord Steel and Lord Ashdown.
We must go into this parliament and beyond with a united sense of purpose and leadership
Mr Oaten said he had the backing of seven MPs, which candidates need to join the contest, but had not got "permission" to release them yet.
His decision to run means there will be no "coronation" where MPs unite behind a single candidate and avoid a leadership vote by the 70,000 Lib Dem members.
Announcing his candidature on Tuesday afternoon, the Winchester MP said: "It's about vision, energy and ambition.
"I'm really ambitious for this party. We have got to persuade and get across to this country that this party wants to get into power."
Mr Oaten said he was "no great fan" of political coalitions but the Lib Dems should be prepared to talk to either of the other main parties in the event of a hung Parliament, if they sign up to a liberal agenda.
Mr Oaten said he wanted to modernise the Lib Dems and take on the "nanny state" instincts of the Labour Party.
He pointed to his work opposing some of the government's anti-terror laws.
25 January - nominations close
6 February - ballot papers sent out
1 March - vote closes
2 March - result announced
And he said he would challenge the "fake" liberalism of Tory leader David Cameron.
Mr Oaten said he had been flooded with messages from Lib Dem members who wanted him to stand.
He is believed to be the favoured candidate of former Lib Dem leader Charles Kennedy, who stood down at the weekend after admitting a drink problem.
Mr Oaten is seen as on the right of the party and contributed to the Orange Book, which included essays by other MPs proposing a move to more free market policies.
He is currently third favourite at the bookmakers to land the Lib Dem crown, behind Sir Menzies and Mr Hughes.
Sir Menzies said he would not comment on the leadership race until the campaign officially started.
He added: "We have to be looking forward. The first serious electoral test we will face is in the local government elections in May in England and Wales."
There are claims there is bad blood in the party after the way Mr Kennedy was treated.
Lib Dem MP Lynne Featherstone has said she wants to know what part the leadership candidates played in Mr Kennedy's departure.
Asked whether he had done enough to support Mr Kennedy, Sir Menzies said: "I am satisfied that I fulfilled my responsibilities to the party in this matter."
Nominations for the leadership close on 25 January, with Lib Dem members given just over three weeks to choose a new leader.
The party has said it wants a new leader in place in time for its spring conference on 3 March.
An opinion poll in The Times suggested support for the party had fallen sharply following the drama surrounding Mr Kennedy's departure.
A Populus poll for the paper carried out between Friday and Sunday found support had dropped three points to 16% since last month, the party's lowest rating since 2001.