Nicol Stephen, 45, may be on a journey to the top job

Jim Wallace, the current leader and deputy first minister, will be leaving the post after 13 years.

Mr Stephen is the first to declare his candidacy for the leadership.

The 45-year-old has the backing of many MSPs, but he could face a challenge from Mike Rumbles who opposes a further coalition with the Labour Party.

At a news conference in Edinburgh on Tuesday, Mr Stephen told reporters that the Lib Dems were the "party of the future".

'Not for me'

Nine other Lib Dem MSPs, including fellow Cabinet minister Ross Finnie, joined him as he made his announcement.

The Aberdeen South MSP said: "My aim is for the Liberal Democrats to emerge stronger than ever and to be well-placed to lead Scotland.

"That is why I want to lead the Scottish Liberal Democrats, lead the Liberal Democrat team to greater success in Scotland's councils, in the House of Commons and the Scottish Parliament.

"To sit back and hope that some day, somehow, someone else will do what is needed for the party or for Scotland to succeed is not for me."

Mike Rumbles may also go for the leadership

Mr Wallace said he planned to stand down officially as leader at the end of June and from there it was up to the party to set the timetable for electing a new leader.

He said he thought a leadership battle would be "healthy" for the party.

Although Tavish Scott MSP had been tipped as Mr Wallace's possible heir, he has ruled himself out of the contest and instead will become Mr Stephen's campaign manager.

Another possible contender for the post is Mr Rumbles who is currently Lib Dem spokesman on health.

The 48-year-old West Aberdeenshire and Kincardine MSP said recently that he hoped Mr Wallace would not take the party into a third coalition with Labour.

Independent party

"If the Liberal Democrats signed a third coalition agreement with Labour, there would be a leadership challenge," he predicted.

Mr Rumbles has said he will not make a decision about standing until he meets the Liberal Democrats' parliamentary group in Edinburgh on Tuesday evening.

On the issue of coalition government, Mr Stephen refused to pass judgement.

He said: "I don't rule out any options for the future, but we will go into the election in 2007 as an independent party, with our own manifesto and policy priorities."

Mr Stephen added: "I've always felt that the Liberal democrats have been strongest in a campaign when they focus on Lib Dem policies and the Lib Dem manifesto."