Conservative rivals Rishi Sunak and Liz Truss, offering competing answers to Britain's multiple crises, will duel in the coming weeks to become the next prime minister after the party's lawmakers held a concluding vote Wednesday.
Former finance minister Sunak, running on a centrist platform of fiscal rectitude allied with "green levies" to fight climate change, again headed the field with 137 votes in the MPs' fifth and final elimination ballot.
The crucial race for second place was narrowly won by Foreign Secretary Truss on 113 votes, against 105 for former defence secretary Penny Mordaunt.
Sunak and Truss now take their case to Conservative party members, who will decide the new leader and prime minister after a series of nationwide hustings in August.
The result will be announced on September 5. But Britain is already guaranteed to get either its first prime minister of colour or its third woman leader.
"We need to restore trust, rebuild the economy, and reunite our country," Sunak said after his win, as Britain contends with its worst slump in living standards in decades on top of the economic fallout of Brexit.
"We've got a really positive message to take out to all our members now: crucially, who is the best person to beat Keir Starmer and the Labour party in the next election?" he said, referring to the UK's main opposition party and its leader.
"I believe I'm the only candidate who can do that."
Truss tweeted that she was "ready to hit the ground running from day one", after writing in the Daily Telegraph that her economic revival plan was "based around tax cuts, deregulation and tough reform.”
'Hasta la vista'
Sunak's resignation as finance minister this month helped to topple outgoing leader Boris Johnson after months of scandal including "Partygate," and Downing Street is reportedly running an "anyone but Rishi" campaign.
At his last session of Prime Minister's Questions in the House of Commons earlier, Johnson bowed out by saying "Hasta la vista, baby!"
In a hint of support for Truss's Thatcherite platform, the premier urged his successor to "cut taxes and deregulate where you can to make this the greatest place to live and invest.”
He urged the contenders to continue his strident backing for Ukraine, and "stay close to the Americans."
But whoever wins the Tory race, "like some household detergent, would wipe the floor" with Starmer's Labour, Johnson predicted.
Mordaunt – the one-time bookmakers' favourite – lapsed to outsider status after Truss's fellow right-winger Kemi Badenoch was eliminated on Tuesday.
Former minister David Davis, a backer of Mordaunt, accused Sunak of lending votes to Truss so he could face her in the run-off.
"He wants to fight Liz, because she's the person who will lose the debate with him," he told LBC radio.
A YouGov poll published before the vote indicated that, despite his popularity with colleagues, Sunak was the least appealing candidate to the members.
The BBC plans to host a live televised debate with the final two candidates on Monday. Sunak won the two previous debates, according to snap polls, and the second one featured a no-holds-barred clash with Truss.
'Fantasy economics'
Sunak's popularity with the Tory grassroots has faded since questions were raised over his family's tax arrangements, and as he presided over sky-rocketing inflation, which hit a new 40-year high of 9.4 percent in June.
In a new policy announcement, Sunak vowed an "ambitious new plan to make the UK energy independent" by 2045 to prevent future energy-driven inflation spikes, after Russia's war in Ukraine sent gas prices rocketing.
Mordaunt had headed the same YouGov poll of Tory members previously.
But she slipped after a damaging few days in which her former boss, one-time UK Brexit pointman David Frost, slammed her work ethic and questions were raised over her stance on transgender rights.
Johnson announced on July 7 he was quitting as Conservative leader after a government rebellion in protest at his scandal-hit administration.
Under Britain's parliamentary system, the leader of the biggest party is prime minister and can be changed mid-term without having to call a general election.
Labour's Starmer accused the Tory candidates of "fantasy economics" before turning his fire on the outgoing Johnson.
"He is a complete bullshitter and I think he's been found out," he told Labour prime minister Tony Blair's former spin chief Alastair Campbell in a podcast, referring notably to "Partygate.”
by AFP / Jitendra Joshi & James Pheby
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