Stephane Dion announced today he will resign as leader of the federal Liberals to strengthen his party in advance of a crucial confidence vote next month.

Last month, Dion signalled his intent to lead the party until his successor was chosen at a leadership convention in May.

But in his resignation statement, the outgoing opposition leader suggested he is acceding to pressures within the Liberal party to step aside before Parliament starts again on Jan. 26.

If the federal budget proposed by Stephen Harper’s Conservatives is defeated, a Liberal-NDP coalition could replace the government.

“As the Governor General has granted a prorogation, it is a logical time for us Liberals to assess how we can best prepare our party to carry this fight forward,” reads Dion’s statement. “There is a sense in the party, and certainly in the caucus, that given these new circumstances the new leader needs to be in place before the House resumes.”

In the statement, Dion said he will officially step down once a successor is chosen.

According to recent reports, the race to replace the outgoing leader will come down to a tight contest between Bob Rae and Michael Ignatieff, following the withdrawal of New Brunswick MP Dominic LeBlanc.

A Liberal caucus vote to elect an interim leader – which would most likely favour Ignatieff – is anticipated for Wednesday.

Geoff Dembicki is a staff reporter for the Hook.