Johnson had raced home from a holiday in the Caribbean to secure the backing of 100 lawmakers to enter Monday’s ballot to replace Liz Truss, the woman who succeeded him in September after he was driven out of office over a string of scandals.

Johnson said he had secured the backing of 102 lawmakers, but that he had failed to persuade either Sunak, or the other contender Penny Mordaunt, to come together “in the national interest”.

“Therefore I am afraid the best thing is that I do not allow my nomination to go forward and commit my support to whoever succeeds,” he said in a statement late on Sunday.

“I believe I have much to offer but I am afraid that this is simply not the right time.”

Sterling rose more than half a cent against the dollar in early trading in Asia.

Johnson’s statement likely paves the way for his arch rival Sunak to become prime minister, possibly as soon as Monday, replacing Truss who was forced to resign after she launched an economic program that triggered turmoil on financial markets.

According to the rules of the accelerated contest, if only one candidate secures the backing of 100 Conservative MPs, they will be named prime minister on Monday.

If two candidates pass the threshold, they will go forward to a vote of the party membership, with the winner announced on Friday, just days before new finance minister Jeremy Hunt is due to lay bare the state of the country’s finances on October 31.

That had raised concerns that Johnson would return to Downing Street with the backing of the party members, and not a majority of lawmakers in parliament, leaving the party badly divided. Hunt declared his backing for Sunak late on Sunday.

Some Johnson supporters could switch to Mordaunt, who has presented herself as the unity candidate, but many immediately switched to Sunak. A source close to the Mordaunt campaign said the former defence minister would continue in the contest.

“She is the unifying candidate who is most likely to keep the wings of the Conservative Party together,” the source said.

Johnson has loomed large over British politics ever since he became mayor of London in 2008 and went on to become the face of the Brexit vote in 2016. While he led the Conservative Party to a landslide election in 2019, he was forced out just three years later by a rebellion of his ministers.

Sunak said he hoped Johnson would continue to contribute to public life “at home and abroad”.

One Sunak supporter, who asked not to be named, said his main reaction was relief because if Johnson had won the “party would have torn itself apart”.

Another Conservative lawmaker Lucy Allan said on Twitter: “I backed Boris for PM, but I think he has done the right thing for the country.”

Other Johnson backers immediately jumped ship.

Cabinet office minister Nadhim Zahawi, who minutes earlier had published an article on the Daily Telegraph website praising Johnson, said “a day is a long time in politics”.

“Rishi is immensely talented, will command a strong majority in the parliamentary Conservative Party, and will have my full support and loyalty,” he said.

Earlier, many of the Conservative lawmakers who normally back Johnson switched their support to Sunak, saying the country needed a period of stability after months of turmoil that has sparked headlines – and raised alarm – around the world.

Johnson is also still facing a privileges committee investigation into whether he misled parliament over Downing Street parties during Covid-19 lockdowns. He could be forced to resign or be suspended from office if found guilty.