Martin made his name as a fiscal conservative

He takes over from Prime Minister Jean Chretien, and will inherit the premiership when Mr Chretien is due to retire in the coming weeks.

Mr Martin - an old rival of Mr Chretien - was sacked in June 2002 for launching a leadership campaign against the prime minister.

Mr Martin was overwhelmingly endorsed by a party convention on Friday.

He got 94% of the vote at the meeting in Toronto, against 6% to the only other contender, Sheila Copps.

Handover

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

Chretien has had a good innings, but Liberals want change at the top

The 65-year old former minister is widely respected by the financial markets, and won praise for bringing budgets under control during his tenure between 1993 and 2002.

"We succeeded in the last 10 years because we did not deviate from course - balanced budgets, a continually dropping debt-ratio, lower taxes," he said on Friday.

Mr Chretien - the longest-serving leader in the Western world - is preparing to stand down after a decade in office.

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.