Menzies Campbell resigns as leader of the Lib Dems after just two years

Sir Menzies Campbell went to ground last night after dramatically resigning as leader of the Liberal Democrats.

With support for the party plummeting, he was told that he no longer had the confidence of his MPs or the voters.

Less than two years after Charles Kennedy was brutally deposed as leader, MPs were preparing to mount another drawn-out political assassination.

Sir Menzies beat them to it by announcing his immediate resignation, and left a question-mark over his decision by taking a vow of silence.

His decision triggered a scramble among the so-call "young Turks" who had backed his campaign to topple Charles Kennedy.

Friends of home affairs spokesman Nick Clegg said he would run for the top job on a "dream ticket" with the party's family spokesman David Laws, who would be treasury spokesman in the hope of matching David Cameron and George Osborne.

The new leader is expected to be in place by Christmas. He faces the daunting task of rebuilding support for a party which is threatened with extinction at Westminster.

Party sources confirmed that Sir Menzies, 66, had been "ruthlessly knifed" by discontented MPs.

Despite declaring at the weekend that he had the "energy, ideas and determination" to continue, he quit amid mounting criticism of his age and performances.

Even his close allies conceded that he had to go after polls showed the party's popular support slumping to a mere 11 per cent - enough by some accounts to cost every Lib Dem seat at the next election.

Supporters of Mr Clegg and Chris Huhne, the environment spokesman, were accused of launching a damaging whispering campaign to "destabilise" the leader.

In his letter of resignation, Sir Menzies said: "It has become clear that following the Prime Minister's decision not to hold an election, questions about leadership are getting in the way of further progress."

This led to speculation that deputy leader Vince Cable - one of Sir Menzies's closest Parliamentary allies and a key figure in his rise to power - told him the game was up, with one MP suggesting it was a "pearl-handled revolver moment".

Many among the party's grass roots would love Mr Kennedy to return as leader after he led them to their best electoral performance since the war in 2005.

But, given the revelations about his drink problem, he is highly unlikely to be offered a way back.

Sir Menzies was noticeably absent when his resignation was announced on the steps of the Lib-Dems' London HQ at 6.30pm.

Even his closest Parliamentary allies were baffled by his disappearance. Tourism spokesman Don Foster said he "hadn't the foggiest notion" where he was.

Sir Menzies - pronounced Ming - had battled cancer four years ago.

Friends were worried that he did not have the physical strength to sustain a battle with his rebellious MPs. Rumours were circulating that he had quit because he needed a hip replacement operation.

The Prime Minister paid tribute to Sir Menzies - his constituency neighbour in Fife - describing him as "a man of great stature and integrity who has served his party and country with distinction".

Intriguingly, Mr Brown held out the prospect that he could invite Sir Menzies to join his political "Big Tent" by adding: "I am sure he will continue to make a major contribution to public life."

David Cameron said: "Sir Menzies Campbell has had a distinguished parliamentary career and is a fine public servant."

Mr Cable - who will take charge of the party until a new leader is elected - said Sir Menzies had earned "respect, affection and gratitude".

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Earlier in the day, however, the deputy had irreparably damaged his leadership by admitting it was a subject "under discussion".

Lib Dem peer Lord Taverne had already ratcheted up the pressure when he called for senior members of the party to press Sir Menzies to quit, warning that otherwise "the party goes down the drain".

And on Sunday Mr Hughes, who fought the last leadership election, told a TV interviewer:

"The leader obviously has to do better, get better at getting the message across better, at getting the policy out better."

So how did it go so wrong for the urbane Edinburgh QC? In fact, the knives were out for the former Olympic runner even before he took over the leadership.

As the man blamed by Mr Kennedy for wielding the dagger in January 2006, Sir Menzies found it difficult to command the trust of all his MPs and halt the whispering campaign against him.