Caroline Kennedy's surprise decision to drop her attempt to take Hillary Clinton's vacated US Senate seat revived speculation yesterday that she could follow in her grandfather's footsteps and become ambassador to Britain.

After painful, last-minute prevarication, Ms Kennedy finally withdrew her candidacy for the seat in a one-sentence statement soon after midnight, citing personal reasons.

Her decision came as the Governor of New York prepared to announce his choice for the Senate seat after the confirmation of Mrs Clinton as the new US Secretary of State.

Governor David Paterson, the son of a powerful New York politician, has sole power to name Mrs Clinton’s successor in the Senate and will make an announcement today.

Among the leading candidates left in the field is Andrew Cuomo, the state attorney-general and son of Mario Cuomo, the former New York Governor. Other contenders include Representatives Kirsten Gillibrand, Carolyn Maloney, Steve Israel, Jerrold Nadler, Brian Higgins and Byron Brown, the Mayor of Buffalo.

Ms Kennedy, 51, the only daughter of the assassinated president, would have become the latest in a continuous line of Kennedys in the Senate stretching back to her father's first Senate win in 1952.

Her uncle Robert Kennedy once held a Senate seat from New York and her other uncle, Edward Kennedy, now suffering from a brain tumour, is a longstanding senator from Massachusetts.

Brought up in the public eye, she shunned the spotlight until she stepped out in the presidential election campaign to offer decisive support for Barack Obama in the Democratic primaries.

Her political debut bombed with the public, however, when she refused to make financial disclosure and mumbled during press interviews, saying “you know” 142 times in a single interview with The New York Times.

An aide said yesterday that she withdrew because of a personal matter that was not related to the illness of Senator Kennedy, who suffered a seizure at an inaugural luncheon with President Obama on Tuesday. The aide gave no further details.

Now that her Senate ambitions have come to an end, attention returned to the earlier prospect of her pursuing an ambassadorial career. During the campaign Ms Kennedy was mooted as a possible US ambassador to Britain or to the United Nations. The UN job has been filled but she could still be named to the Court of St James's.

Her grandfather, Joseph Kennedy, served as US Ambassador to Britain from 1938 until 1940. He is remembered for his strong support for the policy of appeasing Hitler. He stepped down after telling The Boston Globe in November 1940 that “Democracy is finished in England. It may be here.”

Times Recommends

• Please help: maimed children of war want their lives back
• Cabal seizes diamond riches to buy power
• White House gatecrashers got to the president