Charles Kennedy is the new leader of the Liberal Democrats, the party has announced.

He replaces Paddy Ashdown, who steps down after 11 years as leader of the UK's third political party.

The result means the rural affairs spokesman has succeeded in beating off a strong challenge from health spokesman Simon Hughes.

Mr Kennedy - who is best known for having become an MP aged 23 and his appearances on TV gameshows - had been the bookies' favourite throughout the contest.

His first response after the result was confirmed was to joke: "From here on it's downhill all the way."

He paid tribute to Mr Hughes, whom he said waged a "magnificent, positive, inspirational campaign".

The key challenge he identified in his acceptance speech was re-engaging the interest of voters in politics.

He told his party colleagues he would continue to work with Labour in some areas, but only those where the party backed such co-operation.

"Our campaigning on the government's failure on health, education and much else besides isn't about to let up," he promised.

After his short speech, Mr Kennedy walked off the platform to shake hands with Mr Ashdown.

Simon Hughes: Closed in during long campaign

Mr Hughes indicated shortly after that he would be prepared to work as the new leader's deputy.

"We'll work together. I don't think there'll be any major decision which he'll reach as leader on which I wouldn't want to support him."

He predicted Mr Kennedy would lead the Lib Dems into government within the next decade.

Five candidates in race

In all, five of the Lib Dems' 46 MPs contested the election, with a series of husting meetings held around the country during the two months since campaigning began.

About 90,000 party members were entitled to vote in the postal ballot, with 61.6% choosing to do so.

The election was held under a proportional representation system, with voters able to list as many candidates as they liked in order of preference.

The count had to include second, third and fourth choices before Mr Kennedy emerged as the clear winner. At this stage, he had 56.6% of the vote, compared to Mr Hughes' 43.4%.

Economics spokesman Malcolm Bruce surprised many by coming third, ahead of the one woman in the race, Jackie Ballard, who only entered the Commons in 1997. Social security spokesman David Rendel finished last.

Blair offers 'co-operation'

Mr Ashdown has warned his successor he faces a tough task leading the Lib Dems into the new millennium.

Signing off: Paddy Ashdown stands down

"Riding this party means you're riding a very strong animal," he said.

"You need to have a very clear idea about where you want to go, otherwise you find it moves in the direction it's determined to go in."

The continuation of the links built up between the Lib Dems and Labour under Mr Ashdown was a key factor in the leadership race.

Earlier on Monday, a spokesman for Tony Blair said the prime minister hoped the new leader would seek to develop this process.

"The prime minister has always felt and continues to believe that the co-operation between Labour and the Liberal Democrats has worked to the benefit of both parties," the Downing Street spokesman said.

"He stands ready to continue that co-operation if that is what the new leader of the Liberal Democrats and the party wishes."

Mr Kennedy was regarded as the candidate most in favour of strengthening ties with Labour, but he has also criticised the party strongly in recent days.