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Ontario's Liberal Premier Dalton McGuinty holds a press conference in the Ontario Legislature on Monday October 15, 2012, after resigningChris Young/The Globe and Mail

Dalton McGuinty won't be challenging Justin Trudeau for the federal Liberal leadership.

The Ontario premier has decided to look for challenges outside politics altogether.

"I made a commitment ... both to myself and to some supporters to carefully consider a run for the Liberal leadership for the Liberal Party of Canada," Mr. McGuinty told The Canadian Press.

"I've talked it over with family and supporters and I've decided not to run."

Mr. McGuinty has been under mounting pressure to run for the federal party's top job since he shocked the nation last week by announcing his intention to resign as premier.

Some of his closest advisers have put together a campaign team that would have been ready to go this week had Mr. McGuinty decided to take the plunge.

Liberals eager for a heavyweight rival to Mr. Trudeau, the prohibitive front-runner, have been urging Mr. McGuinty to leap to the federal arena. A source close to the premier said he's received encouragement from "Bay Street titans, private labour leaders, student and community leaders, particularly by current mayors, former premiers from across the country and two former prime ministers."

Mr. McGuinty thanked all those who would have supported his candidacy and joked that his wife, Terri, "thanks all those who were opposed."

He said two factors heavily influenced his decision to stay out of the fray: the conflicting timing of the federal and provincial leadership races and the 10-year commitment required to rebuild the shattered federal party, which was reduced to a 34-seat rump in the 2011 election.

The Ontario Liberal Party has set the weekend of Jan. 25 for choosing his successor. Mr. McGuinty noted he's promised to stick around as premier until his successor is chosen, "a job that takes 110 per cent of my time." That would leave little time to campaign in the federal race, which is already well under way, although the starting gun doesn't officially go off until Nov. 14, and culminates on April 14.

Moreover, Mr. McGuinty noted he's served 22 years in provincial politics – 16 at the helm of Ontario Liberals, nine as premier – and said that's enough for him, and for his family.

"My family has supported me throughout. So, it's time for me to take on challenges outside of politics and I am confident that I'm going to find other ways to serve my province and my country and that's what I look forward to doing."

The 57-year-old, who spent years turning around the provincial Liberals' dismal prospects, said he's simply not prepared to make the kind of long-term commitment required to rebuild the federal party.

"It is a big undertaking. It is a long-term commitment. It reminds me somewhat of where our party (in Ontario) was many years ago," he said.

"I would argue it takes a decade-long commitment and that is not something that I'm prepared to commit to after my time in politics."

That said, Mr. McGuinty said he is "very optimistic" about the future of the federal Liberal party.

"One of the things I've discovered in talking to people in different parts of the country is there's a tremendous bedrock of goodwill and enthusiasm. It's not being manifested on the surface at this point in time but it is there nonetheless," he said.

"I would also argue ... that we are, by inclination and in terms of our history, we are small 'l' liberals, we Canadians. And it's just a matter now of doing the necessary work to recommit ourselves to Canadians, to show people that we are hungry, that we have good ideas, that we understand the future, we know where our place for success can be found in that future and to get on with the work.

"So I am, in fact, very optimistic about the future of my federal party."

The prospect of an effective coronation for Mr. Trudeau, eldest son of former prime minister Pierre Trudeau, fuelled much of the movement to draft Mr. McGuinty. Even those who support the Montreal MP, the federal party's undisputed rock star, believe it would be better for the party to have a vigorous race that attracts public attention and tests the mettle of the eventual winner.

Mr. McGuinty said he believes "it's always better that we have a strongly contested race for the leadership, that's just healthier for all concerned."

Still, he added: "Anybody who seeks the leadership here, I think my advice to them would be this had better be about much bigger things than just stopping another candidate. You know, you've got to have some ideas and some energy and some idealism that you want to put on the table."

Other than Mr. Trudeau, a handful of little-known contenders are already stumping the country: constitutional lawyer Deborah Coyne, mother of Mr. Trudeau's half sister; Ottawa lawyer David Bertschi; and Vancouver lawyer Alex Burton. Several others appear close to jumping in, including Liberal House leader Marc Garneau, Canada's first astronaut; former MP and leadership contestant Martha Hall Findlay; and Toronto lawyer George Takach.

Mr. McGuinty said he'd be surprised if other serious contenders didn't enter the race. That could potentially include his own brother, Ottawa MP David McGuinty, who has mused about running for the leadership although he has shown few signs so far of putting together a campaign team.

"You'd have to ask him directly," Mr. McGuinty said of brother David. "And if he were to seek the leadership, he'd have my whole-hearted support."

He said the prospect of potentially running against his brother was not a factor in his decision, saying he and David "would never pull a Miliband brothers" – a reference to Ed and David Miliband who both sought to lead Britain's Labour party in 2010; Ed won. Had they both wanted to run for the federal leadership, Mr. McGuinty said he and David would have "come to an understanding" but it never came to that.

"It's not in keeping with where I find myself today and where I want to go tomorrow so it's now in his (David's) court. If that's something that he wants to do, he has my support."

Speculation about the premier making a federal leadership run has been dismissed by some pundits as a distraction ploy, aimed at diverting attention from the scandals and controversy that chased Mr. McGuinty out of the premier's office a year after winning a third election, with a reduced minority mandate, only a year ago.

However, behind the scenes, some of Mr. McGuinty's closest advisers – including Don Guy, mastermind of his three election victories, former chief of staff Chris Morley, deputy chief of staff Dave Gene and former director of operations Charlie Angelakos – had quickly started pulling together a national campaign team.

Insiders said they had strong organizations in British Columbia, Ontario and Quebec, people in place to head up youth and social media campaigns, develop policy and manage communications. Finance chairs were set to be announced in Vancouver, Calgary, Toronto and Montreal. A campaign strategy – aimed at encouraging voter engagement – had been developed.

"It was coming together surprisingly quickly," said one. "What we thought would be a testing of the waters quickly became a campaign team in waiting."

"Dalton would have brought a lot to the race," said another. "He rebuilt the (provincial) party and battled the Conservative attack machine to win three times. He has a track record of result in health and education and a vision for the future of the country.

"But the timing of the provincial convention at the end of January made it impossible to mount a campaign."