Jim Wallace has acted as first minister before

Most analysts expect Education Minister Jack McConnell to succeed him.

Mr McConnell was narrowly beaten by Mr McLeish in the race for the first minister's post following the death of former leader Donald Dewar 14 months ago.

Other possible contenders are Finance Minister Angus Mackay, Enterprise Minister Wendy Alexander and Health Minister Susan Deacon.

Jim Wallace, the leader of the Scottish Liberal Democrats - Labour's coalition partners at Holyrood - has been designated acting first minister until the successor is chosen.

It is the third time Mr Wallace has been a caretaker first minister - he stepped into the job when Mr Dewar fell ill, and again following his death.

Mr Wallace, on Friday, insisted the business of running Scotland must go on after Mr McLeish's departure.

He said: "The important point is that the business of government must go on.

Education Minister Jack McConnell: Tipped as favourite

"There is a programme for government and a lot of policies are in place and are currently being rolled out."

The Scottish Lib Dem leader said he had not spoken to Mr McLeish since Thursday and called for the former first minister to be given some privacy.

He added: "I think he deserves some peace and quiet."

To start the procedure of finding a new first minister, the Labour party must first choose the successor it wants.

Under party rules, the new leader will be decided by an "electoral college" made up of three equal parts - ordinary members; trade unions; and MPs, MEPs and MSPs.

It must then nominate the successful candidate for the post of first minister.

The Scottish Parliament must then endorse the party's choice - under its rules, that must be within 28 days of Mr McLeish's resignation.

Wendy Alexander: McLeish called her "talented and hard-working"

Mr McLeish has repeatedly stressed he did not make any personal gain after sub-letting part of his Fife office during his 14 years as an MP at Westminster.

But he said he wanted the Scottish Parliament to be able to continue with its "real and pressing business" with the minimum of distraction.

Both the Conservatives and the Scottish National Party had been demanding the first minister's resignation over the Officegate row, but he had been expected to survive a debate on Thursday as he had the support of Labour and Liberal Democrats MSPs.

But Scottish newspapers had also been calling for him to go.

And it is believed that fresh revelations over a sixth sub-let of his Fife office led to his decision to step down.

Two days earlier he had admitted receiving �36,000 in rent from five companies while a Westminster MP without registering the income with the Commons authorities.

Health Minister Susan Deacon: Possible contender

He had already agreed to repay �9,000 to the fees office and said he was prepared to pay back the remaining cash if necessary.

But it is understood that on Wednesday evening he learned of the discovery of a sub-let to a charity, which had not been disclosed to him by those investigating the matter.

On Friday Mr McLeish was keeping a low profile at his family home in St Andrews, Fife, where he travelled straight after making his resignation statement to the Scottish Parliament.

He has promised to continue to work as an MSP for Central Fife.