By VERNON SMALL, JOHN ARMSTRONG and FRAN MOLD
Bill English will be elected leader of the National Party today after Jenny Shipley last night acknowledged a majority of her MPs wanted a change.
A dignified Mrs Shipley, who has led the party since she ousted Jim Bolger in 1997, said she was deeply disappointed, but respected the right of her colleagues to make the call.
"I am stepping down, but not by choice," she said.
"It's clearly someone else's turn, and Bill English, I believe, tomorrow will be chosen as the leader of the party."
Mr English said last night that filling the leadership vacancy was entirely in the hands of the caucus. But he is not expected to face a challenger.
A key English lieutenant, shadow leader of the House Roger Sowry, is frontrunner to replace Mr English as deputy leader.
Another possibility would be Gerry Brownlee, who is a Shipley supporter, but sources said the caucus was likely to favour an English-Sowry ticket.
Mr Sowry would not comment last night.
Sources said a decision on the deputy leadership might be deferred for a week.
Mrs Shipley's decision to quit ends almost two years of speculation about a coup which began after National lost the 1999 election.
Mr English has always been the heir apparent, but consistently claimed he would not seek to oust Mrs Shipley before the election.
Mrs Shipley, who was New Zealand's first woman prime minister, refused to comment on how the coup was handled or on the numbers in the caucus.
But National sources said the move crystallised after Mrs Shipley's poor performance in the House last week on her return from overseas, and her comments that she wanted to talk to individual caucus members.
One MP said it gave the impression she was talking tough about disciplining MPs outside the caucus, but did not front inside.
The sources said the coup began with "cells" of dissatisfied MPs rather than an organised coup.
Once some late undecided votes swung in behind Mr English it was clear there was a significant majority for change.
But they were surprised she did not fight the challenge.
MPs pointed the finger at Mr Sowry and Albany MP Murray McCully as ringleaders in the coup.
Mrs Shipley said that when she took the reins in 1997 the party faced a serious defeat.
Her job was to try to win, and if National did not, to limit the damage.
Flanked by supporters Max Bradford and chief whip John Carter, she said she was yet to decide if she would stay in Parliament.
Her decision was announced last night after a poll showed a majority of National voters believed she should step down.
The TV3/NFO CM Research poll showed Mr English was the most popular choice to replace Mrs Shipley, with 40 per cent backing.
The Prime Minister maintained her position as preferred leader on 32 per cent, with Mrs Shipley and Mr English tied for second on 9 per cent.
Labour retained a big lead in the poll with 49 per cent against National's 32 per cent.
Helen Clark said last night that Mr English and his cabal had "white-anted" Mrs Shipley for some time, and that her resignation was no surprise.
"Whatever one thinks of her politics, she has made her mark."
New Zealand First leader Winston Peters said the coup was inevitable.
"Mrs Shipley was never fit for the job in the first place and allowed her inflated ego to collapse a coalition and obtain a job she could not do," he said.
The National Party president, Michelle Boag, who has called for new blood in the party, said she heard about the resignation only after it was made public.
She said the decision was a dignified response.