Theresa May will announce a Downing Street departure date after MPs next vote on her Brexit deal in June.
The prime minister, after a crunch meeting with senior Tories, agreed to make way for a new leader once MPs have voted on the Withdrawal Agreement Bill – which is believed to be taking place on June 7.
The decision means that regardless of whether the Commons approves her Brexit deal, Mrs May’s time in Downing Street is now nearing an end.
The announcement came following a “tough but courteous” two-hour meeting between the prime minister and the powerful backbench 1922 Committee of Conservative MPs.
A source, who was present at the meeting, told the Press and Journal: “The meeting was tough and there were some frank views aired but it was courteous.
“The prime minister held her own.
“There were some who said they didn’t want the prime minister to go and others who said we’ve had a terrible set of local election results and lost thousands of councillors and you have to go.
“But for all the hyperbole, it was a polite meeting and a sensible timetable was set out.”
Following the meeting, Sir Graham Brady, who chairs the 1922 Committee, said: “The prime minister is determined to secure our departure from the European Union and is devoting her efforts to securing the second reading of the Withdrawal Agreement Bill in the week commencing June 3.
“We have agreed that she and I will meet following the second reading of the Bill to agree a timetable for the election of a new leader of the Conservative and Unionist Party.”
The announcement came as Boris Johnson confirmed he would be a contender when the contest took place.
The former foreign secretary was reported to have told a business event in Manchester on Thursday: “I’m going to go for it. Of course I’m going to go for it.”
The SNP’s Westminster leader Ian Blackford raised fears an “extreme Brexiteer” such as Mr Johnson would now replace Mrs May.
The Ross, Skye and Lochaber MP said: “The only thing we’ve learned from this latest fudge from the 1922 Committee is that Theresa May is so incompetent that she can’t even resign properly.
“Scotland is paying the price of this toxic Tory civil war over Brexit, which threatens to inflict lasting harm on people’s jobs, living standards, public services and the economy.
“Throughout the entire Brexit process, Scotland’s people and parliament have been completely ignored by Westminster – while the Tories and Labour focus only on their own internal battles.”
