LIZ Truss has conceded defeat and said she will step down as Prime Minister. 

The Tory leader presided over chaos in her short time in office, being forced to junk her flagship economic programme and the sacking of her friend and chancellor Kwasi Kwarteng. 

It will make her among the shortest-serving prime ministers in UK history and, even without a general election, the Conservatives will be on their third prime minister since December 2019.

She said she would remain in post until her successor is chosen but that she has already spoken to the King to inform him of her intention to resign. 

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A leadership election will be complete in a week's time.

In a short statement, a smiling Truss said she did not have the mandate to deliver on her agenda. 

She said: "I came into office at a time of great economic and international instability. Families and businesses were worried about how to pay their bills.

"Putin’s illegal war in Ukraine threatens the security of our whole continent and our country has been held back for too long by low economic growth.

“I was elected by the Conservative party with a mandate to change this. we delivered on energy bills, and on cutting national insurance. And we set out a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit.

“I recognise though that given the situation I cannot deliver the mandate on which I was elected by the Conservative Party.

“I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Tory party."

She added: "This morning, I met the chairman of the 1922 Committee Graham Brady.

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"We’ve agreed that there will be a leadership election to be complete with in the next week.

“This will ensure that we remain on a path to deliver our fiscal plans and maintain our country’s economic stability and national stability.

“I will remain as Prime Minister until a successor has been chosen.”

Her authority was torn to shreds last night during a vote on fracking and on the steps of No 10 this afternoon she acknowledged she had lost the confidence of the Tory party. 

It comes after her new Chancellor Jeremy Hunt, appointed Friday last week, junked most of her flagship economic programme shortly after he took office. 

Former chancellor Kwasi Kwarteng's mini-budget spooked the markets and led to a firesale of goverment bonds which threatened the collapse of pension funds and also led to the value of the pound against the US dollar reaching its lowest ever levels.   

She spoke after a meeting with Graham Brady, the chair of the 1922 Committee, who wields the power to hold a confidence vote in the PM, also attended by Tory party chairman Jake Berry and Therese Coffey. 

Speaking after Truss's announcement, Brady confirmed a successor would be in place by October 28 - in time for the fiscal statement on Halloween. 

He said that Tory members and MPs would have a vote in the contest. 

Ian Blackford, the leader of the SNP in Westminster has called for a general election following Truss's announcement. 

He said: "It was inevitable Liz Truss would have to go after all the damage she's inflicted - but merely swapping leaders of a broken and chaotic Tory government is not enough.

"There must now be a general election. People will accept nothing less."

Labour leader Keir Starmer said the Tory party "no longer has a mandate to govern" and called for a general election.

The opposition leader said: "The Tories cannot respond to their latest shambles by yet again simply clicking their fingers and shuffling the people at the top without the consent of the British people. They do not have a mandate to put the country through yet another experiment; Britain is not their personal fiefdom to run how they wish.

“The British public deserve a proper say on the country's future. They must have the chance to compare the Tories’ chaos with Labour’s plans to sort out their mess, grow the economy for working people and rebuild the country for a fairer, greener future. We must have a chance at a fresh start. We need a general election - now.”