Blair Resignation

Blair made his announcement in a speech to supporters in his constituency of Sedgefield, in northern Britain, where he launched his parliamentary career in 1983.

"On 27th June, I will tender my resignation from the office of prime minister," he told Labour party supporters in his constituency of Sedgefield in northeast England.

"I have been prime minister of this country for just over 10 years. In this job, in the world today, I think that is long enough for me, but more especially for the country. Sometimes the only way you conquer the pull of power is to set it down," he said.

He trumpeted the changes Britain has undergone since 1997, when he took office.

That year "was a moment for a new beginning, the sweeping away of all the detritus of the past. Expectations were so high, too high probably, too high probably for either of us," he said.

"Now in 2007 you can easily point to challenges and grievances that fester, but go back to 1997, think back, no, really think back about your own living standards, then in May 1997 and now."

Speaking at Trimdon Labour Club, where he launched his bid for the Labour party leadership in 1994, he said: "I come back here to Sedgefield where my political journey began and where it will end."

Blair also defended his record in office, saying "I did what I thought was right" during his decade in power. In particular he defended his decision to stand shoulder to shoulder with the United States in the aftermath of Sept. 11, 2001, including going to war against Iraq in 2003.

Announcement signals chance for renewal

Despite his best efforts to leave a legacy of social reforms and international climate accords, Blair's time in office will be forever remembered for his decision to involve Britain in the deeply unpopular Iraq war.

Many believe his relationship with the British people was irrevocably damaged by the Iraq decision and his continued support for US-led adventures. Consequently, Labour's position in the British political landscape took a battering as voters registered their displeasure.

While never publicly admitting as much, Labour insiders have been urging Blair to step down sooner rather than later in an attempt to salvage what was left of public support.

His long-awaited announcement triggered a seven-week process for the election of a successor, most likely to be Gordon Brown, the chancellor of the exchequer.

Blair, who together with Brown founded New Labour, allegedly promised Brown back in 1994 that he would enable him to "share" the premiership at some point in the future.

But such a pledge has never been officially confirmed, and, as Blair took the party to three election victories in succession, the impatience of Brown supporters grew.

Under intense pressure from the Labour Party, Blair declared last September that he would step down "within a year."

Earlier Thursday, Blair informed the cabinet in London of his plans. At the meeting, Brown was said to have praised Blair's "unique leadership."

Campaign for leadership election

The preparations for the internal leadership election to determine his successor are expected to begin almost immediately.

In Britain, the prime minister is the head of the largest party in parliament and a general election does not have to be called if he or she resigns.

Under Labour Party rules, the election process begins when its ruling National Executive Committee (NEC) first meets about 72 hours after the leader's announcement of a resignation and sets a timetable for a campaign.

Prospective candidates each have to secure the signatures of at least 44 (12.5 percent) of the 353 Labour Party members of parliament in the lower House of Commons to have their name on the ballot paper.

After nominations closes, hustings -- election meetings in which candidates stake their claim for the post -- take place across the country. All "validly nominated candidates" -- even if unchallenged -- are expected to attend.

Brown stands relatively unchallenged

At the moment, Finance Minister Gordon Brown is the most likely winner, after other potentially strong candidates like Environment Secretary David Miliband and Home Secretary John Reid ruled themselves out in recent weeks.

Other minor candidates could stand. Former environment minister Michael Meacher and backbencher John McDonnell have said they want to challenge Brown, although it is unclear if they will be able to garner enough signatures to do so.

Voting begins after campaigning ends.

Any fully-paid up member of the Labour Party or members of its affiliated organizations -- such as trades unions and socialist societies -- who pay a political subscription to Labour can vote.

Labour had 198,026 individual members as of Dec. 31, 2005, according to the 2006 NEC annual report.

The ballot is expected to take about two weeks. A procedures committee, made up of the Labour Party general secretary and senior party representatives, including the NEC, oversees the election process.

The winner must have secured more than 50 percent of the votes of the electoral college, which is split three ways between Labour Party members, British and European parliament lawmakers and affiliated associations.

The process is the same for the deputy leadership post left vacant by Deputy Prime Minister John Prescott, who is expected to announce his resignation at the same time as Blair.