Sir Menzies Campbell resigned suddenly as the Liberal Democrat leader last night in yet another convulsion for British politics. Vince Cable, the Treasury spokesman and deputy leader, has taken over as acting leader.

A fortnight during which Gordon Brown moved from a 12-point lead in the polls to a deficit to David Cameron of seven points ended with the Liberal Democrats losing their second leader in 18 months. Sir Menzies appeared to have been the victim of a brutal, yet bloodless, coup. He has been holding one-to-one meetings with front benchers in recent days after Mr Brown’s decision not to hold an autumn election and his party’s fall in the polls. They appear not to have told him to his face to quit, he had not detected enough support to stay on.

Some opponents of Sir Menzies were in the process of setting up a “recall” website, similar to the one used to oust Gray Davis, the former Governor of California. This would have allowed activists to force Sir Menzies to stand down, and was to be activated in the next few days.

His resignation statement last night was curt and suggested that he did not want to go public on the circumstances of his departure.

Nick Clegg, 40, the party’s home affairs spokesman, and Chris Huhne, 53, the environment spokesman, who finished second to Sir Menzies in the last leadership battle, emerged as the obvious frontrunners in the fight to succeed him. The contest could take two months or more. Mr Clegg quickly became the hot favourite with the bookmakers.

Also expected to stand is Steve Webb, who has just completed writing the party’s manifesto in draft. Although a low-profile figure outside Westminster, he is a well-regarded figure on the left of the party who ran Simon Hughes’s leadership campaign.

Sir Menzies told a meeting of confidants at the party’s Cowley Street headquarters yesterday afternoon that he had decided to go because a leadership row would damage his party, which has slumped in the polls during the conference season, even more.

Few people were told of his decision, and even at 5pm members of his official staff were saying that he had no intention of going. But 90 minutes later Mr Hughes, the party president, and Dr Cable appeared on the steps of Cowley Street to announce that Sir Menzies had gone with immediate effect. Friends said that he was too upset to appear in public and that he was talking to his wife, Elspeth.

Last night the immediate cause of the announcement was not clear. There were rumours that Sir Menzies had been told that if he did not go there would be a challenge to him.

Mr Huhne’s friends were said by party sources to have been in “open rebellion” after his party’s drastic fall in the polls in recent weeks.

Sir Menzies’s resignation letter suggested he felt that his job was not completed but gave the impression that he had decided that he had no choice but to go. He said when he was elected leader that he had three objectives: to restore stability and purpose in the party after Mr Kennedy’s resignation; to make the internal operations of the party more professional; and to prepare the party for a general election. “With the help of others, I believe that I have fulfilled these objectives, although I am convinced that the internal structures of the party need radical revision if we are to compete effectively against Labour and the Conservatives,” he wrote.

“But 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 by the party.”

He therefore submitted his resignation with immediate effect. “I do not intend to hold a press conference or to make any further comment,” he added.

Sir Menzies kept a low profile throughout the day, and was said to have spent the evening having a quiet dinner with close friends. The only glimpse of him came after midnight, when he was seen at the window of his Edinburgh home.

Ironically it was Mr Hughes’s remark on Friday that Sir Menzies had to do better that caused the latest burst of speculation, but yesterday he told colleagues that he had not been intending to provoke a contest. Mr Hughes said in a statement: “Over the past two years, Ming has given stability and purpose to our party. He has hugely professionalised the working of our party and led its very successful preparations for the next general election. Ming has made this decision, as all his political decisions, in the interest of his party and Liberal Democracy throughout Britain.”

Mr Cable said: “During his time as leader Ming has earned the respect, affection and gratitude of the party. This was reflected in the warmth with which his speech was received by the party conference three weeks ago.”

Mr Kennedy, who lost office after a messy confrontation with his MPs, said: “I am sorry that things have ended up for Ming in this way, but know the gratitude felt towards him within the party. I don’t doubt he has a valuable ongoing contribution to make to the Liberal Democrats into the future.”

The Prime Minister also paid tribute to Sir Menzies’s leadership. He said: “Sir Menzies Campbell is a man of great stature and integrity who has served his party and country with distinction. His contribution on foreign policy and international affairs is valued throughout the world. I am sure he will continue to make a major contribution to public life.”

Sir Menzies’s future was thrown into doubt after latest polls showed his party slumping to an 11 per cent rating as it suffered a classic squeeze on the revival of Tory fortunes.

Earlier in the day the writing had been on the wall for Sir Menzies when Dr Cable refused to endorse him in an interview with The World at One on BBC Radio 4. He added that it was very likely that Sir Menzies would want to stay. Within hours the leader had decided to quit.

Norman Baker, a leading backbencher, said: “I imagine what happened was he decided the pressure was too significant.”

What happens next

— Only Liberal Democrat MPs are entitled to stand for leadership Any MP wanting to run needs to get the backing of 10 per cent of the party’s 63 MPs and 200 party members from at least 20 different constituencies

— Ballots will be sent to the party’s 70,000 members who will vote using the single transferable vote system, listing each candidate in order of preference

— Votes from the least popular candidates are reassigned to others until one candidate has more than 50 per cent of the votes The process is expected to last six to eight weeks

Source: Constitution of the Liberal Democrats

The Liberal Democrat contenders

— Nick Clegg, Home Affairs spokesman

Odds: 4/5

Age
40, married September 2000 Miriam Gonzalez-Durantez, 2 sons
Educated
Westminster, Robinson College Cambridge, Univ of Minnesota
Signs of ambition?
Tight lipped in public. Then admitted during party conference: “If there was a vacancy in the future then I probably would.” Later attacked by Sir Menzies’ wife for his comments
Positioning
Seen on the centre right of the party, received tentative overtures from Tories
Advantages
Telegenic, articulate, has been loyal to Sir Ming
Disadvantages
Inexperienced in Parliament, has privately shown occasinal irritation with activists

— Chris Huhne, Environment spokesman

Odds: 3/1

Age
53, married 1984, Vicky Pryce, 2 sons, 2 daughters
Educated
Westminster, Sorbonne, Magdalen College Oxford
Signs of ambition
First stood for leadership two years ago against Sir Menzies and Simon Hughes. “Friends of Chris Huhne” drew attention his local Lib Dem performance in the May elections which bucked national trends
Positioning
Says he is appeals to the centre of the party, his environment brief has made him popular with activists
Advantages
Clever, cross-party appeal, raised profile of envrionment in party, perceived as being in tune with activist
Disadvantages
Unpopular amongst some in Parliamentary party, some believe he has been too overtly ambitious

Odds: Ladbrokes

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