Dr Carey has led the Church of England and an estimated 70 million Anglicans worldwide for 11 years and could have stayed in his post until he turns 70 in 2005.

I look forward to exciting opportunities and challenges in the coming months

Dr George Carey

But the 66-year-old is set to step down in the autumn, after taking part in the Queen's Golden Jubilee celebrations.

In a statement Dr Carey said: "By the end of October I shall have served 11 and half years in a demanding yet wonderfully absorbing and rewarding post.

"I feel certain this will be the right and proper time to stand down.

"I look forward to exciting opportunities and challenges in the coming months, and then to fresh ones in the years that follow."

Lambeth Palace said Dr Carey will carry on with all his duties as normal up to his last day in office on 31 October.

Commenting on the announcement, the leader of Roman Catholics in England and Wales, Cardinal Cormac Murphy-O'Connor, praised Dr Carey's achievements and said he would be greatly missed.

He said: "Archbishop George Carey and I are good friends and I have appreciated very much our collaboration in ecumenical endeavour.

"Dr Carey has had to live through some difficult times as Archbishop of Canterbury.

"As leader of the Anglican Communion he emerged as someone of immense integrity, zeal and courage."

Women priests

Dr Carey has had an eventful and often difficult reign since he was appointed the 103rd Archbishop of Canterbury in 1991.

His main achievement was to oversee the first ordination of women priests in 1994 and manage the deep divisions it created within the Church of England.

He gained a more conservative reputation during the last Lambeth Conference of all Anglican bishops, in 1998, which took a hard line against the practice of homosexuality among priests.

The Bishop of Rochester is a possible successor

In 2000, it was reported that the Queen had asked the archbishop to delay his retirement until at least 2003 so he could oversee the spiritual side of her 50th anniversary on the throne.

Lambeth Palace refused to comment on the speculation at the time.

The BBC's religious affairs correspondent Robert Piggott says Dr Carey does not view his decision as early retirement, pointing out that most clergy retire at 65.

He also wants his successor to have plenty of time to prepare for the next Lambeth Conference in 2008.

'Mixed tenure'

Conservative MP Ann Widdecombe, the former shadow home secretary who left the Church Of England over the ordination of women and became a Catholic, said it would be wrong not to recognise Dr Carey's achievements.

She told BBC News: "I think he has had a very mixed tenure but I think it would be ungracious at the point at which he is retiring not to acknowledge that at least the church has been held together through what has been a monumentally difficult time."

She also warned that the next Archbishop of Canterbury would have to deal with issues with further potential for splits, including homosexuality in the church and whether to ordain women as bishops.

Renewed struggle

Dr Carey, the son of an East End porter, has often been seen as a man of the people - he was the first Archbishop of Canterbury in modern times not to have attended Oxford or Cambridge universities.

His departure will see renewed struggle between the conservative and liberal wings of the church, over his successor.

Among possible candidates are the Bishop of London, Richard Chartres, who has opposed the ordination of women as priests.

Another is the Bishop of Rochester, Michael Nazir-Ali, who was born in Pakistan and caused a stir when he branded married couples who opt to remain childless as "self-indulgent and incomplete".

A leading liberal candidate is Archbishop of Wales, Rowan Williams, a high-powered theologian and writer.