"I am today announcing my decision to step down as leader of the Labour Party with immediate effect. In national politics the only cycle that matters is from Dáil to Dáil.
My six-year term as party leader runs to October 2008. My staying on for another year would only make sense if I intended contesting a second term. It is not my intention to do so.
Therefore, at the beginning of the lifetime of a new Dáil is the opportune time to elect a new leader and allow him or her find their feet before local and European elections.
In the context of the broad historical sweep of general elections since 1922, a Labour Party with 20 seats in Dáil Éireann and six seats in Seanad Éireann represents a creditable performance. In the context of expectations that Labour might break out of its traditional niche, the outcome falls short.
The fact remains, however, that Labour, having for the first time exceeded the 100 county councillors threshold and with significant new faces in the PLP [Parliamentary Labour Party], is well positioned to expand and grow.
As regards electoral strategy, I remain absolutely convinced that it was correct at this time to offer the people the choice of an alternative reforming government. It was not successful, but unsuccessful only by a narrow margin. Electoral strategy is a tactical consideration only, and it would be a mistake in the debate now under way in the party to restrict that debate to electoral strategy.
Whereas the core values of Labour are timeless and immutable, we must accept that Irish society has changed and we must change in how we relate these values to today's electorate.
Labour policies and Labour in government has played a significant role in ushering in the modern Ireland when others opposed change. Labour is also proud of its role in helping to bring peace to Northern Ireland. Labour must now show itself to be able to adapt to the new Ireland it helped create.
Labour is a party in the mainstream of European social democracy, a philosophy that has shaped some of the most progressive and successful societies in the European Union.
For reasons of history the Irish Labour Party, uniquely in Europe, must thrive in the context of a very unusual configuration of political parties. However, Labour still dominates the social democratic space. The challenge predicted from Sinn Féin in, for example, north and west Dublin did not materialise, nor did the one from the Green Party elsewhere. Labour has the experience, the tradition and the professionalism to capitalise on this in the lifetime of the new Dáil.
In the recent general election Labour, under my leadership, had twin objectives: viz to win more seats in Dáil Éireann; and, in alliance with Fine Gael, to form an alternative government. In the event, Labour won the same number of seats as in 2002 and failed to replace the existing Government. As leader I take responsibility for that outcome.
Finally, I want to thank most sincerely those exceptional people who worked with me over the last five years.
I hope that on reflection they will recognise that if I were to stay as leader until October 25th, 2008, a new leader would not be in place until Christmas 2008, some five months before local and European elections.
Whoever is elected leader will have my support and I will continue to work for the party to the best of my ability."