Canada's interim Liberal leader to step down

The veteran debater Bob Rae, 63, had taken on the caretaker role a year ago after the Liberals suffered their worst loss since Canada became a country in 1867, on the understanding that he would not enter the race for the permanent position. Even so, he had been widely expected to throw his hat in the ring.

On Wednesday, he said at a news conference outside the House of Commons that he would step aside for the good of the party.

His decision leaves Justin Trudeau, the magnetic but mercurial son of former Prime Minister Pierre Trudeau, as the potential candidate with the most name recognition. The party will chose its new leader next year.

Trudeau, 40, has said he would not run because of the time it would take him away from his young family, but many in Ottawa think he will change his mind.

The 2011 election reduced the centre-left Liberals to the third-biggest party for the first time, with the Conservatives capturing a majority and the New Democratic Party, to the left of the Liberals, emerging as the official opposition.

Reflecting on his party's weakened status, Rae said on Wednesday the Liberals should not be counted out.

"I have great optimism in the future of the Liberal Party and great optimism in the future of my country, but things will have to change for that to happen," he said.

Rae said the party would have "to get its act together" and come together behind an effective, forward-looking leader.

Rae is a formidable debater in both English and French, able to think on his feet on the floor of the House rather than reading from notes.

That said, he has carried political baggage from his days as premier of Ontario, when he was in the New Democratic Party. His high deficit spending and forced pay cuts for civil servants are still remembered two decades later.

(Reporting by Randall Palmer)