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Interim Liberal Leader Bob Rae speaks to reporters in the foyer of the House of Commons on June 13, 2012.Chris Wattie/Reuters

Bob Rae has told his caucus that he will not be seeking the post of permanent leader of the Liberal Party.

"The way in which I can serve my party best is by not running for the leadership," Mr. Rae told reporters Wednesday after revealing his decision to the Liberal caucus.

"It hasn't been an easy decision," he acknowledged, citing pressure from colleagues and friends, along with speculation in the media that he would run.

But "I think it's best for the party and it's a decision that I feel comfortable with," he concluded.

Mr. Rae, 63, confirmed he will remain as Interim Leader until a permanent replacement is chosen next spring.

The announcement confounds the expectations of his own caucus, of analysts, of Conservative and NDP strategists.

It throws the race for the Liberal leadership wide open. It will increase the pressure on Montreal MP Justin Trudeau to step up to the leadership plate.

It is, in a word, a shocker.

The board of directors of the Liberal Party will meet Wednesday night to firm up plans for the leadership race, with a vote to be held sometime in spring of 2013.

The board was also expected to formally release Mr. Rae from his pledge, as Interim Leader, not to seek the permanent helm.

Mr. Rae had promised that he would announce his intentions shortly after the board made that decision. Instead, he decided to pre-empt the matter entirely.

He denied that age, health, or other personal considerations influenced his decision. "My health is great. ... I have a very happy personal life," he insisted.

As for the question that he might, as a man in his sixties, be too old to seek the leadership, Mr. Rae was blunt: "I think it's bullshit."

While acknowledging that he would very much have liked to win the leadership in 2006 or 2008, he said he simply concluded now was not the right time to repeat that effort.

More than anything else, Mr. Rae said, he concluded that his initial decision to serve as Interim Leader on condition that he not serve as permanent leader "was a reality that needs to be respected."

Asked why he hadn't announced this decision earlier, he answered simply: "I hadn't made up my mind."

In some respects, Mr. Rae's decision is a bit of a blessing for the party. By staying on as Interim Leader, he will provide a steady hand in caucus and before the public as Liberals seek a new chief and a new direction.

Beyond that, his decision not to run will lessen the internecine tension that has afflicted the Liberals for decades. Already, the party was dividing into two camps: those who wanted Mr. Rae to lead the party into the next election, and those who wanted anyone but Mr. Rae in that job.

On the one hand, his experience and high public profile would have made him a formidable opponent to Prime Minister Stephen Harper and NDP Leader Thomas Mulcair.

On the other hand, many feared that Ontario voters had neither forgotten nor forgiven Mr. Rae's tenure as NDP premier of that province, which led to his sound defeat in 1995.

By stepping aside from the contest, Mr. Rae has eliminated one possibility of a polarized race that could have led to increased factional bitterness after the result, whatever the result.

Others who are mulling leadership bids –  MPs Dominic Leblanc, Marc Garneau, David McGuinty, and former MPs Gerard Kennedy and Martha Hall Findlay, among others – will reconsider their positions, now that there is a much more even playing field in which a lesser name will have a better shot at capturing the leadership of the troubled third party.

But many who believe the Liberals are in danger of extinction unless they find someone who can galvanize progressive support in Quebec and Ontario will argue that Mr. Trudeau must now step forward, even though he has repeatedly said he is not planning to run.

The Montreal MP, however, said Mr. Rae's announcement would not affect his own decision to stay out of the race.

"My decision is a sign of my own reflection and my family reflection," Mr. Trudeau said after the caucus meeting, "and my decision is a no, still."

With reports from Gloria Galloway and Bill Curry