Plaid's victory at Westminster in 1974

He said he had not recovered as quickly as he had hoped from treatment for a heart condition, and that he had been given medical advice that he must cut down on his workload.

There had been mounting speculation about Mr Wigley's future leadership of Plaid Cymru since he was forced to take time off recently due to heart problems.

Dafydd's single-minded commitment has set new standards for everyone in Welsh politics

Marc Phillips, Chairman Plaid Cymru

He saw a specialist last week following surgery in December.

He told a press conference at Llandudno on Wednesday that he would stay on as an MP and AM for Caernarfon, the seat which he has represented at Westminster since 1974.

"I had hoped to lead Plaid Cymru into the next general election," he said.

"It is, however, unfair to the party and my colleagues to cling on to these key posts at such a vital time.

"I had heart treatment in December. I'd hoped that I would have been back up to speed by now - clearly, I wasn't," he told BBC Radio 4's PM.

"I didn't want to follow poor old John Smith and face the fate that he did and therefore I had to take this decision."

He added: "Plaid Cymru as a party is bigger than any one individual.

Liberal Democrat leader Mike German

"I hope to give more time to my constituency work. It is my intention to fulfil my term as MP and continue as AM hoping to be fit enough to stand again in 2003."

Mr Wigley said he intended to focus his future efforts in the National Assembly on disability issues and industrial development, two issues close to his heart.

Assembly First Secretary Rhodri Morgan paid tribute to Mr.Wigley.

He said he was a politician for whom he had the utmost respect and with whom he had worked closely in the assembly.

Mr Morgan said his retirement on health grounds was an important reminder that there are far more important things than the cut and thrust of party politics.

Since his election to Parliament, Mr Wigley has been one of the prime advocates for self-government for Wales ever since.

'Single-minded'

Twenty-three years after his election, he celebrated along with other party leaders as the electorate voted in favour of setting up an Assembly.

The party's chairman, Marc Phillips, said the people of Wales owed a great debt to Mr Wigley for his work for the country.

"Dafydd's single-minded commitment has set new standards for everyone in Welsh politics," he said.

"His strong personality and unique leadership is the reason why there is international respect for Plaid Cymru.

"Scarcely has a party had such as talented and industrious leader."

The party would now be looking to appoint a new leader, he said.

'Great experience'

Earlier, in anticipation of his resignation, other political opponents began paying tribute to Mr Wigley.

Scottish National Party leader Alex Salmond said Plaid Cymru had benefited greatly from his leadership.

"Dafydd has been a superb leader of Plaid Cymru.

"Under his direction, Plaid have reached new heights of success, with a stronger base of support than ever before.

"The SNP send Dafydd and his family our very best wishes for the future."

"Dafydd's loss here would be felt," said Liberal Democrat leader Mike German. "We would be losing someone of great experience.

While the Conservatives highlighted Plaid's "stunning" result in the Assembly elections in May 1999, Labour's Ron Davies spoke of his effective campaigning in the run-up to the Assembly referendum in 1997.

"Plaid Cymru had a very effective campaign of getting people out to vote," he said.

"So, in that sense, he showed very considerable political skill."