Mr Chretien's political career has spanned 40 years

Mr Chretien, who has been in office for 10 years, listed his achievements, which include eliminating Canada's budget deficit and promoting growth.

He drew cheers for invoking Canada's independence in not sending troops to join the US-led war against Iraq.

Mr Chretien is widely expected to be succeeded by Paul Martin next month.

'Social conscience'

At the Liberal Party convention in Toronto, Mr Chretien said that when his government came to power in 1993, the country was facing its worst crisis in 50 years.

"Canadians had given up believing that Canada could ever work again," he said.

However, under his premiership, the country's $32bn deficit had been eliminated and three million new jobs had been created.

Canadian unity had also been maintained by containing the separatist movement in French-speaking Quebec.

Mr Chretien said: "It was because of our deep belief as Canadians in the value of multilateralism that we did not go to war in Iraq."

He added: "We have also known when we must go our own way internationally - in an manner that is consistent with our values, doing the right thing, no matter how difficult."

Mr Chretien said the Liberals had restored "an activist, progressive, nationalist government" and told his audience: "We must never lose our social conscience."

Power struggle

Mr Chretien is the longest-serving Western leader after winning three consecutive majority victories for the Liberal Party.

But in recent years, his leadership of the party has been undermined by a power struggle with former Finance Minister Paul Martin, who has been pushing for his removal.

Mr Martin is expected to win a first-round victory when the party convention votes for a new leader on Friday.

As party leader, Mr Martin would automatically become prime minister, since the Liberals are the largest party in Canada's House of Commons.

In his speech, Mr Chretien mentioned Mr Martin's name only twice, but he described his likely successor as "a great Liberal" who had his support.

Mr Chretien told reporters he would meet Mr Martin next Tuesday to arrange the handover of power and would probably announce his departure date then.