ACT leader Rodney Hide has announced that he is ceding his party's leadership to former National Party leader Don Brash, who has been challenging him for it.
[image:1810:half:right]Mr Hide made the announcement at a news conference at midday on Thursday.
He said he was proud of what ACT had achieved under his leadership but now believed that Dr Brash was the best person to lead the party into the general election in November 2011.
He said he had advised Dr Brash of this on Thursday morning and pledged his full support.
Sitting alongside the man he is replacing, Dr Brash said he was deeply honoured to have been invited by the ACT caucus to lead the party.
He told the news conference he had become a member of ACT on Thursday morning. Up to now he has belonged to the National Party.
A special ACT caucus meeting will be held on Saturday where Dr Brash's leadership will be formally endorsed.
Mr Hide's future
Mr Hide will stay on as an ACT MP, saying he is ACT "through and through", and will keep his ministerial posts.
He said, however, it was up to the party whether or not he stands in Epsom at the election.
Dr Brash has said he would like to see former Auckland mayor John Banks stand in Epsom and, speaking to Checkpoint, he said it was his personal preference that Mr Hide not remain an MP after the November poll.
Mr Banks says he will stand in Epsom for the ACT Party, if the board and the incoming leader want him to. He is not yet a member of ACT.
No impact on Government
Mr Hide says he spoke to the Prime Minister, John Key, about his decision to stand down as ACT leader on Wednesday night and he made it clear at Thursday's news conference that the change of leadership would not affect the party's confidence and supply agreement with National.
Acting Prime Minister Bill English refused to comment on the change of leadership, saying through a spokesperson it is a matter for ACT.
But Labour Party leader Phil Goff says an ACT party headed by Dr Brash would be bad news for middle and low income New Zealanders.
Mr Goff says National will use ACT's influence as an excuse to implement moves such as slashing the minimum wage, and cutting health and education services, Working For Families and interest-free student loans - all things "National had always wanted to do but didn't have the courage to implement because they are not popular".
United Future leader Peter Dunne describes Dr Brash's take-over of the leadership of ACT as a step backwards, saying his extreme right-wing politics is not the style of politics most New Zealanders want to see.
Newcomer apparently switched vote
Dr Brash has spent the past week intensely lobbying ACT's four other MPs. He appeared to have the support of Heather Roy and Sir Roger Douglas but deputy leader John Boscawen was standing by Mr Hide.
The other MP, newcomer Hilary Calvert, publicly pledged her support to Mr Hide but apparently switched to Dr Brash's camp on Wednesday, thus ensuring the success of his bid.
He needed the support of three out of ACT's five MPs.
