Leading Brexit campaigner Farage quits as UKIP leader

"I have decided to stand aside as leader of UKIP," he told a London press conference. "The victory for the 'Leave' side in the referendum means that my political ambition has been achieved."

The 52-year-old vowed to watch Britain's renegotiation process with the EU "like a hawk" as he continued to serve as an MEP in Brussels.

"If there is too much backsliding... then UKIP's best days may be yet to come," he said.

His words will be taken as a warning to those hoping to replace Conservative Prime Minister David Cameron, who resigned after the referendum, saying he would leave Britain's exit negotiations to his successor.

In a pointed reference to frontrunner Theresa May, who wanted Britain to stay in the EU, Farage said Britain's next leader should be a "Brexit prime minister".

He also offered his services to "other independence movements springing up in other parts of the European Union".

Farage becomes the second leading Brexit campaigner to step aside in the wake of their seismic victory in the June 23 vote, after former London mayor Boris Johnson pulled out of the race to succeed Cameron last week.

Manfred Weber, the German head of the centre-right European People's Party in the European Parliament, called the UKIP leader a "coward" for quitting.

"Farage is the latest coward to abandon the chaos he is responsible for," he tweeted. "This shows that he has no credibility at all."

'Make most of hand dealt'

Along with the political turmoil, Brexit has been predicted to hit Britain's economy, and the country last week had its credit rating downgraded.

Seeking to stem fears of a business exodus, finance minister George Osborne on Monday said he would seek to slash corporation tax.

Osborne could cut Britain's levy on company profits to under 15 percent, the Treasury said Monday, confirming a weekend report in the Financial Times newspaper.

The new target, which has no timetable, would give Britain the lowest rates of any major economy, putting it closer to the 12.5 percent rate in neighbouring EU member Ireland.

"We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt," Osborne, who had campaigned with Cameron for Britain to stay in EU, told the FT.

Scott Corfe, an analyst at the Centre for Economics and Business Research, said the corporation tax cut would be a sensible move.

"With signs that the economy is set to slow drastically, there is a strong case for fiscal stimulus and measures which assure companies that the UK is an attractive place to do business," he told AFP.

Ireland Finance Minister Michael Noonan downplayed the possible impact on his country, pointing out that Osborne had already announced his intention two years ago to cut corporate tax to 17 percent by 2020.

Immigration dilemma

Osborne's own future as finance minister is far from certain as his Tory colleagues jostle to become the next leader and prime minister.

Brexit champion Andrea Leadsom and former defence minister Liam Fox on Monday made their pitch for the top job, a day before the party's MPs vote to jettison one of the five candidates.

Leadsom, now firm favourite to make the final two-horse run-off, and insisted she would drive a hard bargain during Brexit negotiations with Brussels, if elected.

"I know how to strike a deal in a tough negotiation. And I know, as a woman, how to succeed in a man's world and how to fight the unfortunate prejudice that many working mothers still experience," she said.

The former banker added that "freedom of movement will end", potentially putting her on a collision course with other European leaders.

May has also said she would push for a new trade deal that limited immigration.

"The Brexit vote gave us a very clear message that we couldn't allow free movement (of people) to continue as it had," May told ITV.

But one of her supporters, Foreign Secretary Philip Hammond, said there would be a trade-off between accessing the EU single market and allowing free movement of people.

"Those who believe there is no need for such a trade-off have misunderstood something fundamental about the politics of the European Union," he wrote in the Daily Telegraph newspaper on Monday.