Irish PM to step down, succession contest begins

Irish Prime Minister Enda Kenny said he was stepping down as leader of the Fine Gael party on Wednesday, kicking off a succession contest between two younger ministers who colleagues hope will boost the party ahead of an election due late next year.

Kenny - who had already announced he would not lead Fine Gael into the election - said he would remain prime minister during the contest, due to be concluded on June 2, and subsequent talks with lawmakers backing the government.

Kenny, prime minister since 2011 and leader of his party for almost 15 years, is expected to be replaced by either Social Protection Minister Leo Varadkar, the bookmakers' favourite, or Housing Minister Simon Coveney.

"I would like to stress the huge honour and privilege that it has been for me to lead our party for the past 15 years, in opposition and into government on two successive occasions," Kenny said in a statement. He was due to step down at midnight to become acting party leader until a successor is chosen.

Kenny has overseen Ireland's dramatic turnaround from entering a humiliating three-year state bailout months before he came to power to becoming Europe's fastest-growing economy for the past three years.

But at a parliamentary election last year, Fine Gael suffered a backlash from voters who felt the recovery was passing them by. It lost a quarter of its seats, only returning to power as the senior party in a fragile minority government.

Unsettled colleagues are banking on a new leader reviving their fortunes after falling marginally behind rivals Fianna Fail in most surveys. The race is set to be dominated the two declared candidates: the 38-year-old Varadkar and Coveney, 44.

Whoever wins will take over as prime minister, subject to a parliamentary vote, at least until the election. Fianna Fail agreed last year to abstain in key votes to let the minority government run until late 2018.