Mr Davies drove to London on Monday

On Sunday, Mr Davies said controversy following newspaper allegations about his private life would have been a distraction had he sought re-election.

The announcement ended a week of ever-growing pressure on Mr Davies, 56, to resign after a political career spanning more than 30 years.

The Sun newspaper alleged the AM had a sexual encounter with another man in woodland near Bath last Monday.

Mr Davies, who will remain a Labour party member, denied being there at first, then changed his story, but still insists he did nothing wrong there.

We now move into overdrive to select a new Labout candidate for Caerphilly Rhodri Morgan, First Minister

He has admitted handling the matter badly, and said he had to go for the good of his party.

"The prospect of running as a 'Ron versus the tabloids candidate' was an interesting one," said Mr Davies.

"But it would have been horrific for me and it would be dreadful for the party," he added.

The Welsh Labour party has said a new assembly candidate for Caerphilly can be in place within a week - the deadline for nominations is 1 April.

The new candidate will be hoping to defend Mr Davies' 2,861-strong majority in the constituency on the 1 May election.

Welsh Secretary Peter Hain called this decision a tragic end to an impressive political career.

"This is a sad decision. I think that Ron has done the right thing," he said.

It is important to acknowledge that Ron has resigned with dignity Wayne David, Caerphilly MP

"Ron made a major contribution to public life in Wales over the years, not least as the architect of devolution," he added.

First Minister Rhodri Morgan said he will "move into overdrive" to replace Ron Davies.

"I understand this has been a difficult time for Ron and I wish him and his family well for the future," Mr Morgan said.

"We now move into overdrive to select a new Labour candidate for Caerphilly," he added.

'Dignity'

Other party colleagues paid tribute to Mr Davies with sadness and fondness - but they indicated his decision was the right one.

Ron's contribution to the modern history of Wales has been immense by any standard Jeff Cuthbert, Caerphilly constituency

Caerphilly MP Wayne David said Mr Davies had listened to his local party.

"It is important to acknowledge that Ron has resigned with dignity," he said.

"His political achievements will overshadow any other events which have occurred in recent times," he added.

Jeff Cuthbert, speaking on behalf of the Caerphilly constituency Labour party, said the news of the decision was received "with great sadness".

"Ron's contribution to the modern history of Wales has been immense by any standard," he added.

Equal Opportunities Minister Carwyn Jones - Labour's election campaign director - said Mr Davies had no choice but to go after having altered his story.

Wales Labour Party general secretary Jessica Morden, added that Mr Davies' contribution to modern Welsh politics had been enormous.