Sandra Day O’Connor, the first female Supreme Court justice, announced her retirement today and presented President Bush with his first chance to affect the court's political balance.

Justice O’Connor, 75, who is considered a moderate conservative, was appointed to America's highest court by President Ronald Reagan and took her seat in September 1981.

She often sided with more radical conservatives on the court, including the decision to stop recounts in Florida after the 2000 presidential election, effectively handing the election to Mr Bush over Al Gore.

But she has also charted her own course on some controversial issues, such as the legal status of abortion and the separation of church and state.

Rumours had been circulating for weeks that Justice O’Connor could decide to step down, but many legal analysts had expected the next retirement from the court would be that of Chief Justice William Rehnquist, who is suffering from cancer.

Chief Justice Rehnquist has so far made no announcement on his future, and it is not clear if he will still be in charge when the court reconvenes after the summer recess in October.

Mr Bush paid tribute to Justice O’Connor today at a White House press conference, but said that he will pick a replacement in a timely manner so the vacancy can be filled before the start of the term in October.

"The nation also deserves a dignified process of confirmation in the United States Senate, characterised by fair treatment, a fair hearing and a fair vote," he said.

"I will chose a nominee in a timely manner so the hearing and the vote can be compelled before the new Supreme Court term begins."

He added: "America is proud of Justice O’Connor’s distinguished service and I am proud to know her. She has been a discerning and conscientious judge and a public servant of complete integrity."

The retirement of Justice O'Connor sets up another potentially bruising struggle between the President and the Sentate, where minority Democrats have blocked several of his judicial choices, as well as his nominee for the post of ambassador to the UN, John Bolton, who is still waiting to be confirmed.

In June 2003 Justice O’Connor wrote the ruling that allowed race to remain a factor to be considered in admissions at universities, a key ruling on discrimination that preserved an earlier Supreme Court precedent.

In 1992 she wrote the main opinion that reaffirmed the Supreme Court’s historic 1973 "Roe vs. Wade" ruling that made abortions legal throughout the nation, rejecting the views of four dissenting justices who wanted to overturn the historic decision.

But Justice O’Connor took a characteristic middle-of-the-road position, allowing some minor abortion restrictions and crafting a new, less difficult standard that bars the states from placing an "undue burden" on a woman’s abortion right.

Reports said that the White House has been speeding up consultations on potential new justices in recent weeks.

Justice O’Connor’s retirement opens the first vacancy on the Supreme Court for 11 years. The last justice appointed was the liberal Justice Stephen Breyer, who was named by President Bill Clinton and he took his seat in August 1994. It also leaves Justice Ruth Bader Ginsburg as the sole woman on the nine-strong bench.

Senator Sam Brownback, a conservative Republican, said that O’Connor had been a "role model" for women in the legal profession. "As he deliberates on a nomination to fill this vacancy, I hope and am confident that President Bush will select an individual who is faithful to the text of the Constitution," Mr Brownback said.

Another conservative Republican, Senator John McCain, who is from Justice O’Connor’s home state of Arizona, said:"She did make history - I am confident that President Bush will appoint a Supreme Court Justice who shares his philospohy, which is a conservative philosphy."

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