Mr Blair's announcement will trigger the leadership contest

Mr Blair will tell Cabinet colleagues of his intentions before making his plans public in a speech in his Sedgefield constituency.

His spokesman said Mr Blair would be "focused" o­n being prime minister until Labour has chosen his successor - a process expected to last seven weeks.

Chancellor Gordon Brown is the clear favourite to succeed Mr Blair.

Downing Street's announcement ends weeks of speculation over exactly when Mr Blair would go public with his retirement plans.

His decision to make his first public statement o­n the subject in Sedgefield o­n Thursday follows a longstanding pledge to voters there that they would be the first to know about his future plans.

'Paralysis'

Mr Blair was mocked in the Commons o­n Wednesday by Conservative leader David Cameron for presiding over a "government of the living dead".

Come the general election, it's policy that counts Tony Blair

He accused the government of being in "paralysis," with key Blairite ministers either quitting or waiting to be sacked by Mr Brown.

Mr Blair countered that he would be concentrating o­n "policies for the economy and health, and education and law and order" during the seven weeks he is expected to stay in Downing Street while his Labour successor is chosen.

With a resignation announcement imminent, the Liberal Democrats have tabled a Parliamentary motion urging the Queen to dissolve parliament and call a general election.

Domestic issues

The prime minister's official spokesman stressed Mr Blair still had lots of work to do o­n domestic issues before he quits.

There were two policy review papers o­n the role of the state and o­n families and two white papers o­n planning and energy security yet to be published, he said.

And there would also be international matters to deal with in the run-up to this summer's G8 and EU summits.

The former Cabinet minister and current European Union Commissioner for Trade, Peter Mandelson, said he would support the next Labour leader and denied that Mr Blair's last weeks in office would be as a lame duck leader.

"'He's going of his own choice. He's doing it at a time which he thinks is good for the country, is good for the government."

Frantic activity

Mr Blair's announcement will trigger three days of frantic activity at Westminster, starting o­n Monday, as Labour leadership and deputy leadership hopefuls seek nominations from fellow MPs.

Mr Brown has already been nominated by more than half of the Parliamentary party and will almost certainly not face a Cabinet-level challenge for the leadership, after all of the likely runners refused to stand against him.

Left wing backbenchers John McDonnell and Michael Meacher are battling to gain the 44 nominations needed to get o­n to the ballot paper and ensure there is a contest.

Whoever has the least support will withdraw, giving the other a clear run.

Six deputy leadership hopefuls will also be battling for nominations to enter the race to replace John Prescott, who is due to stand down with Mr Blair.