Leading Brexit campaigner Farage quits as UKIP leader

"I have decided to stand aside as leader of UKIP," he told a London press conference. "The victory for the 'Leave' side in the referendum means that my political ambition has been achieved."

The 52-year-old vowed watch Britain's renegotiation process with the EU "like a hawk" as he continued to serve as an MEP in Brussels.

"If there is too much backsliding... then UKIP's best days may be yet to come," he said.

Prime Minister David Cameron resigned after the referendum result, sparking a leadership contest in his ruling Conservative party. Farage's decision to give up his party's leadership comes just days after fellow Brexit campaign leader, flamboyant former London mayor Boris Johnson, pulled out of the race to succeed Cameron.

Farage said whoever was next chosen to lead the country should be a "Brexit prime minister".

He also offered his services to "other independence movements springing up in other parts of the European Union".

Finance minister George Osborne earlier Monday said he would seek to slash corporation tax over fears of a business exodus following the referendum.

Osborne could cut Britain's levy on company profits to under 15 percent, the Treasury said Monday, confirming a weekend report in the Financial Times newspaper.

The new target, which has no timetable, would give Britain the lowest rates of any major economy, putting it closer to the 12.5 percent rate in neighbouring EU member Ireland.

"We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt," Osborne, who had campaigned with Cameron for Britain to stay in EU, told the FT.

- Immigration dilemma -Scott Corfe, an analyst at the Centre for Economics and Business Research, said the corporation tax cut would be a sensible move.

"With signs that the economy is set to slow drastically, there is a strong case for fiscal stimulus and measures which assure companies that the UK is an attractive place to do business," he told AFP.

Osborne's own future as finance minister is far from certain as his Tory colleagues jostle to become the next leader and prime minister.

Interior minister Theresa May, the frontrunner, on Sunday said that if she won, she would push for a new trade deal with the EU that limits immigration.

"The Brexit vote gave us a very clear message that we couldn't allow free movement (of people) to continue as it had," May told ITV.

But one of her supporters, Foreign Secretary Philip Hammond, said there would be a trade-off between accessing the EU single market and allowing free movement of people.

"Those who believe there is no need for such a trade-off have misunderstood something fundamental about the politics of the European Union," he wrote in the Daily Telegraph newspaper on Monday.

German Chancellor Angela Merkel has insisted any free trade deal would have to include freedom of movement.

The five Conservative leadership contenders have disagreed on how quickly the country should trigger its exit process.

May has insisted there should be "no timescale" for the exit, while her rival Andrea Leadsom has pushed for the process to begin quickly.

Once Britain triggers Article 50, the legal procedure for exiting, it will have two years to negotiate terms.

- 'Kind of hysteria' -The process faces a legal challenge from law firm Mishcon de Reya, which on Sunday said it would argue the government needs the backing of parliament to act.

"The outcome of the referendum itself is not legally binding," said Kasra Nouroozi, a partner in the firm.

Both of Britain's main parties were thrown into disarray by the unexpected result of the referendum.

Jeremy Corbyn, leader of the opposition Labour party, held defiantly to his position on Monday after a mass rebellion by lawmakers, who passed a no confidence vote in him by 172 to 40 last week.

A battle looms between Corbyn's trade union and grassroot backers and the party's MPs.

Conservative MPs are due to begin voting this week to whittle their five candidates down to two.

Last week, former education secretary Michael Gove dramatically pulled support at the last minute from his close ally, Boris Johnson, in order to launch his own bid.

Johnson ignored the incident in his first Daily Telegraph column since the defection, instead criticising the movement to overturn Brexit.

"There is, among a section of the population, a kind of hysteria," Johnson wrote, describing protesters who marched over the weekend against Brexit as being in "a state of some confusion about the EU".

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