KEY POINTS:
"If I couldn't lead the party to victory then it was time to go."
With those words Helen Clark, defeated in her attempt to lead the Labour Party to a record four terms in Government, explained her decision to step down as party leader.
Ms Clark, who had led the Labour Party through five elections, three of them victories, will stay on as the MP for Mt Albert, a seat she has held since 1981 through ten elections.
Her decision to stand down marks a watershed for the Labour Party.
Ms Clark gave no hint of what was to come in her concession speech as spoke to supporters in Auckland.
"Tonight is a night for the winners to savour but we won't be going away."
She warned against what Labour had achieved "going up in the flames of right wing of politics" before revealing she would stand down.
"My job as Labour leader is done."
She said the new leader, who she expected would be appointed before Christmas, would have her full loyalty and support.
Helen Clark made the announcement after telling the Labour party faithful that she accepted the responsibility for the Labour loss.
"So with that, it's over and out from me. Thank you once again and thank you New Zealand for the privilege of being prime minister for the last nine years."
Afterwards, she told reporters: "There is a certain time for a change.
"I've seen tides come in and I've seen tides go out.
"If I couldn't lead the party to victory then it was time to go."
Ms Clark's dramatic announcement came in a night in which Labour saw National make big gains in the party vote in Auckland and provincial centres, lose several key ministers and watch New Zealand First's Winston Peters, a key lieutenant, exit Parliament.
