Former British Finance Minister Rishi Sunak looks set to become the UK's next leader after former Prime Minister Boris Johnson pulled out of the contest on Sunday, saying he had the support of enough lawmakers to progress to the next stage, but far fewer than Sunak's.

Johnson said he had secured the backing of 102 lawmakers and could have been "back in Downing Street," but he had failed to persuade either Sunak, or the other contender Penny Mordaunt, to come together in the "national interest."

"I believe I have much to offer but I am afraid that this is simply not the right time," Johnson said late on Sunday.

Johnson had secured the public backing of just under 60 Conservative lawmakers by Sunday, well under half of the nearly 150 endorsements Sunak had received.

Johnson's statement likely paves the way for his arch rival, the 42-year-old Sunak, to become prime minister, possibly as soon as Monday. If confirmed, he would replace Liz Truss, who was forced to resign after she launched an economic program that triggered turmoil in financial markets.

According to the rules, if only one candidate secures the backing of 100 Conservative lawmakers, 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 lays bare the state of the country's finances in a budget plan due to be released on October 31.

Sunak first came to national attention when, aged 39, he became finance minister under Johnson just as the COVID-19 pandemic arrived in Britain, developing a furlough scheme to support millions of people through multiple lockdowns.

"I served as your chancellor, helping to steer our economy through the toughest of times," Sunak said in a statement on Sunday. "The challenges we face now are even greater. But the opportunities – if we make the right choice – are phenomenal."

If chosen, Sunak would be the first prime minister of Indian origin in the United Kingdom.

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

Sunak's family migrated to Britain in the 1960s, a period when many people from Britain's former colonies arrived to help rebuild the country after World War II.

After graduating from Oxford University, he went to Stanford University where he met his wife Akshata Murthy, whose father is Indian billionaire NR Narayana Murthy, founder of outsourcing giant Infosys, Ltd.

(With input from Reuters)