TORONTO -- Prime Minister Jean Chretien, the longest-serving leader of a Western democracy, announced Wednesday amid an internal party challenge that he will leave office in 2004 instead of seeking a fourth consecutive term.
A gruff politician known for his legislative savvy, Chretien took office in 1993 and oversaw Canada's economic recovery while barely fending off a sovereignty referendum by Quebec.
With rival Paul Martin openly challenging his leadership of the Liberal Party, Chretien's popularity dipped as many in and outside his party complained he was clinging to power for too long.
Speaking at a hastily arranged news conference at a Liberal Party caucus meeting in Saguenay, Quebec, Chretien said he decided two years ago not to run for a fourth term but had wanted to wait longer before announcing his intentions.
With his wife, Aline, at his side, Chretien said he needed 18 months to complete the legislative agenda of his government, then would step down.
"I will not run again," he said. "I will fulfill my mandate and focus entirely on governing from now until February 2004. At which time my work will be done and at which time my successor will be chosen."
Some of his longtime supporters in the room had tears in their eyes as Chretien, 68, signaled the end of one of Canada's most successful political careers, dating back four decades.
He acknowledged that Martin's challenge to his party leadership, which has divided the Liberals and lowered his poll ratings, caused him to hasten the process.
Canadian media have focused on the Liberal dispute in recent months, and a series of polls show growing dissatisfaction, with people generally blaming Chretien for wanting to stay in office.
"This summer we have not been focused on governing. We are not doing our job. Canadians don't like that. Liberals don't like that," Chretien said.
The timing was intended to end the rift between supporters of Chretien and Martin, his longtime finance minister who left the Cabinet in June after Chretien indicated he wanted to serve his full five-year term that ends in 2005 and might seek a fourth term.
Since then, Martin's supporters have waged a de facto leadership campaign, with Canadian media reporting they controlled the majority of Liberal grassroots associations. Martin's supporters at the Saguenay caucus were pressing Chretien to clearly state his intentions.
Martin, in a brief statement to reporters, praised Chretien as an "outstanding prime minister" and a courageous man.
"I can assure you that nobody in the government could have enjoyed the success they did without the support and leadership" of Chretien, said Martin, who declined to answer questions shouted by journalists.
Chretien's departure was unlikely to bring widespread change to the Liberals, with Martin the main contender to succeed him and Deputy Prime Minister John Manley considered another potential candidate.
The longest-serving leader among the countries of the G-8, Chretien led his party to three straight Parliament majorities in federal elections but faced facing increasing problems in his ninth year in power.
Opposition parties have hammered the government with accusations of cronyism, forcing Chretien to revise ethical guidelines. He faced a growing chorus to step down to avoid a leadership showdown with Martin at next year's Liberal Party convention.
In a political career approaching four decades, Chretien has relied on hard work, good instincts and street-fighter skills honed from childhood -- other boys would tease him for the birth defect that left him deaf in one ear and with a misshapen smile -- to climb up the ranks of the Liberal Party and Canadian government.
Referring to himself as the "little man from Shawinigan," a working-class Quebec town, he served under Pierre Trudeau in several Cabinet posts before defeating Martin for the party leadership in 1990 and becoming prime minister three years later.
His government inherited a huge budget deficit upon taking power. Reduced spending and high taxes, along with an economic boom fueled by the strength of the neighboring U.S. economy, brought budget surpluses in recent years.
In 1995, Quebec voters narrowly defeated a sovereignty referendum that Chretien -- a Francophone federalist -- strongly opposed.
Tall and gruff, but also disarming, Chretien never has looked entirely comfortable practicing his lifelong passion. While a master tactician in Parliament, he gets lampooned regularly for an awkward command of both official languages, English and French.
In his 1985 autobiography "Straight from the Heart," Chretien foreshadowed his current political difficulty by writing: "In politics, the exit can be sometimes more difficult than the entrance."