Rishi Sunak has formally declared his bid to be Prime Minister after passing the 100 backers he needed to get on the ballot.
Liz Truss's runner-up is now the frontrunner for No10 after talks late last night bidding for unity with Boris Johnson broke down.
He vowed "integrity, professionalism and accountability at every level of the government I lead" and to "fix our economy".
It pits the two men - who led the government through Covid - against each other in a vicious fight for No10.
Minutes before Rishi Sunak declared, Boris Johnson told MPs he was not backing down despite discussions past 11pm with his old Chancellor.
Leading Johnson supporter Jacob Rees-Mogg appeared to confirm there was no pact, telling the BBC just before 10am: "I have been speaking to Boris Johnson, and clearly he's going to stand, there's a great deal of support for him".
Ex-Chancellor Nadhim Zahawi also indicated Boris Johnson was still fighting on, by declaring his backing at 9.30am on Sunday.
The ex-Chancellor’s new run for Downing Street was an open secret after he resigned in protest against Mr Johnson and ran against Liz Truss over the summer.
He is now in pole position among MPs and could be PM by Friday - or even Tuesday - unless his bid is scuppered by a comeback attempt from Boris Johnson.
Several former Boris Johnson-backing MPs swung behind Mr Sunak after he warned - accurately - that Liz Truss’s package of unfunded tax cuts would cause chaos on the markets.
In the summer leadership contest Mr Sunak had promised a 1p Income Tax cut in 2024, 91,000 civil service job cuts, more electric car charge points and to review all EU laws in 100 days.
But little is known about his plans this time round as the public finances have changed dramatically in the 44 days Liz Truss was Britain’s shortest-serving PM.
Mr Sunak is being challenged by Boris Johnson and Penny Mordaunt.
Allies of Mr Johnson claimed on Saturday he had passed the 100 backers he needed - but Sunak-backing MPs dismissed this as “bluffing” and a “desperate” bid to keep up momentum.
Ms Mordaunt had only just over 20 public backers by Saturday lunchtime, suggesting she would have to drop out.
Penny Mordaunt backer Heather Wheeler told Sky News she had "way more" than 20 MPs pledging for her but would not say how many. A source on the Mordaunt campaign told the Mirror the situation was "still very fluid”.
If Boris Johnson were to drop out of the race, or fail to reach 100 backers, Rishi Sunak could be “crowned” Prime Minister as soon as Monday night or Tuesday morning.
If two candidates get over the 100-nomination threshold they will go to a quick run-off of the Tory membership.
But MPs will hold an “indicative vote” between the two first - ramping up pressure either on members to make the “right” choice, or on one of the two candidates to drop out.
Rishi Sunak's statement in full
The United Kingdom is a great country but we face a profound economic crisis.
The choice our Party makes now will decide whether the next generation of British people will have more opportunities than the last.
That's why I am standing to be your next Prime Minister and Leader of the Conservative Party. I want to fix our economy, unite our Party and deliver for our country.
I served as your Chancellor, helping to steer our economy through the toughest of times.
The challenges we face now are even greater. But the opportunities — if we make the right choice — are phenomenal.
I have the track record of delivery, a clear plan to fix the biggest problems we face and I will deliver on the promise of the 2019 manifesto.
There will be integrity, professionalism and accountability at every level of the government I lead and I will work day in and day out to get the job done.
I am asking you for the opportunity to help fix our problems. To lead our Party and country forward towards the next General Election, confident in our record, firm in our convictions and ready to lead again.
Rishi Sunak MP
