Today's developments came as a complete surprise - even against a background of countless political shocks following the EU referendum result little more than a fortnight ago. Richard Jones reports.
Statement from Theresa May after a dramatic day.
David Cameron said he was delighted that Theresa May would be the next Prime Minister. He will hand in his resignation on Wednesday. He said that Theresa May will be the new Prime Minister on Wednesday evening.
Video: Andrea Leadsom announces that she is quitting the leadership race.
Andrea Leadsom wished Home Secretary Theresa May "the greatest success" as she pulled out of her bid to be prime minister.
Here is Andrea Leadsom's speech in full:
So this morning I have written a letter to Graham Brady, the chairman of the 1922 Committee, and I would like to read it out to you.
The best interests of our country inspired me to stand for the leadership. I believe that in leaving the EU a bright future awaits, where all our people can share in a new prosperity, freedom and democracy.
The referendum result demonstrated a clear desire for change - strong leadership is needed urgently to begin the work of withdrawing from the European Union.
A nine-week leadership campaign at such a critical moment for our country is highly undesirable.
Business needs certainty - a strong and unified Government must move quickly to set out what an independent United Kingdom's framework for business looks like. It is also essential that current EU workers in the UK and businesses that employ them know where they stand.
The Conservative Party was elected only last year with a strong manifesto. We now need a new prime minister in place as soon as possible, committed to fulfilling that manifesto as well as implementing the clear instructions from the referendum.
Theresa May carries over 60% of support from the Parliamentary party. She is ideally placed to implement Brexit on the best possible terms for the British people and she has promised that she will do so.
For me personally, to have won the support of 84 of my colleagues last Thursday was a great expression of confidence for which I am incredibly grateful.
Nevertheless, this is less than 25% of the parliamentary party and after careful consideration I do not believe this is sufficient support to lead a strong and stable government should I win the leadership election. There is no greater privilege than to lead the Conservative Party in government and I would have been deeply honoured to do it.I have, however, concluded that the interests of our country are best served by the immediate appointment of a strong and well-supported prime minister. I am therefore withdrawing from the leadership election and I wish Theresa May the very greatest success. I assure her of my full support. Thank you very much.
Boris Johnson has said he has "no doubt Theresa (May) will make an excellent party leader and Prime Minister" and called for the handover of power to begin "immediately".
There is no chance of reopening the contest. Theresa May will be formally confirmed as the new party leader as soon as the Conservative Party board has been consulted, Graham Brady, the chairman of the Tory backbench 1922 Committee, has said, although he refused to give an exact timetable.
Conservative leadership candidate Andrea Leadsom has sensationally dropped out of the race to replace David Cameron, apparently clearing the way for Theresa May to become the UK's second female prime minister.
Mrs Leadsom - who had admitted she was "shattered" by the experience of intense media scrutiny since securing the second place on the ballot paper in the leadership contest - said she had decided she did not have sufficient support among MPs "to lead a strong and stable government".
Speaking on the steps of her campaign HQ in Westminster, the Energy Minister wished Mrs May "the very greatest success" and promised her "my full support".
She said the country needed a new PM as soon as possible and Mrs May was ideally placed to deliver Britain's withdrawal from the EU following last month's referendum.
The chairman of the Conservative backbench 1922 Committee was due to make a swift statement following Mrs Leadsom's departure, amid speculation that he will confirm that, as the only candidate remaining on the ballot paper, Mrs May can become leader without facing a vote of the party's 150,000 members.
Andrea Leadsom has withdrawn her bid to be prime minister.
The junior energy minister said a nine-week leadership campaign at such a critical time for the UK would be "highly undesirable" and said she had decided she did not have sufficient support among MPs "to lead a strong and stable government."
She added that Theresa May was ideally placed to implement Brexit and offered the Home Secretary her full support.
Speaking on the steps of her campaign HQ in Westminster, she wished May "the very greatest success."
Leadsom pulled out the day after apologising to her Tory leadership candidate rival over comments she had made about motherhood to The Times newspaper.
- The chairman of the Conservative backbench 1922 Committee is due to make a statement following Leadsom's departure, amid speculation that he will confirm that, as the only candidate remaining on the ballot paper, May can become leader without facing a vote of the party's 150,000 members.
There are reports that Andrea Leadsom is leaving the leadership race. She is making a statement this afternoon. More later.