Alex Salmond resigns after Scottish independence defeat

As David Cameron held out the promise of a "new and fair" constitutional settlement for the entire UK, Mr Salmond said he would be standing down as First Minister and leader of the SNP.

A tired sounding Mr Salmond told a news conference at his official residence at Bute House in Edinburgh it was time for new leadership to hold politicians at Westminster to account for promises they made to Scotland during the course of the campaign.

"My time as leader is nearly over, but for Scotland the campaign continues and the dream shall never die," he said.

Earlier the Prime Minister hailed the referendum vote - 55% to 45% against breaking away from the UK - saying it represented the "settled will" of the Scottish people which should put an end to the independence debate "for a generation".

Following a campaign which galvanised all of Scotland, Mr Cameron vowed that promises made by the three main Westminster parties to devolve more powers to Holyrood would be "honoured in full", with draft legislation in January.

But speaking on the steps of Downing Street, he made clear that they would go hand in hand with a "balanced" new constitutional settlement covering England, Wales and Northern Ireland.

In particular, he said there would have to be reform at Westminster to address the thorny issue of "English votes for English laws", suggesting Scottish MPs would no longer be able to vote on exclusively English issues.

Labour - whose chances of obtaining a Commons majority are likely to depend on Scottish votes - reacted warily to the plan.

Ed Miliband warned he would resist any attempt by the Tories to exploit the situation for "narrow political advantage" and called for the creation of a constitutional convention to deal with the whole issue of reform.

However Conservative MPs made clear change was essential, warning they would not tolerate a situation where Scottish MPs at Westminster would be able vote on the level of income tax for England while income tax in Scotland was decided in Holyrood.

At the end of a dramatic night, Mr Salmond finally conceded shortly after 6am that his long-cherished dream of leading his country to independence was over.

"Scotland has by a majority decided not at this stage to become an independent country," he said in a speech to supporters in Edinburgh.

"I accept that verdict of the people and I call on all of Scotland to follow suit in accepting the democratic verdict of the people of Scotland."

A jubilant Alistair Darling, who led the Better Together campaign, said it was a "momentous result" for Scotland and for the United Kingdom as a whole.

"The people of Scotland have spoken. We have chosen unity over division and positive change rather than needless separation," he said.

With the votes from all 32 council areas in, the result was a victory for the No camp by 2,001,926 votes to 1,617,989 - on a record 84.5% turnout.

The result - which was more comfortable for the Better Together campaign than opinion polls had suggested it might be - was greeted with relief in No 10, where there were fears that a Yes vote could have triggered a major political and constitutional crisis.

"The people of Scotland have spoken and it is a clear result. They have kept our country of four nations together and like millions of other people I am delighted," Mr Cameron said.

"Now the debate has been settled for a generation, or as Alex Salmond has said: 'Perhaps for a lifetime'. So there can be no disputes, no re-runs, we have heard the will of the Scottish people."

The Prime Minister underlined his commitment to greater devolution of power to Scotland with an announcement that Glasgow's Commonwealth Games supremo, Lord Smith of Kelvin, would oversee the process.

However his promise of reform at Westminster to ensure that "the millions of voices of England" were also heard, opened up the prospect of a protracted new political struggle leading all the way to the next general election and beyond.

"The question of English votes for English laws, the so-called West Lothian question, requires a decisive answer, so just as Scotland will vote separately in the Scottish Parliament on their issues on tax, spending and welfare, so too England as well as Wales and Northern Ireland should be able to vote on these issues," he said.

For Labour, shadow foreign secretary Douglas Alexander accused the Prime Minister of a "knee-jerk reaction" driven "more by politics than by a considered judgment of the needs of the constitution".

At the same time, Mr Cameron is under pressure from Conservative MPs - many of whom are angry at the way he rushed to sign up for a plan by former prime minister Gordon Brown for wider devolution to Scotland at a moment when the polls were point to a Yes vote.

Former Cabinet minister Owen Paterson said it was "unacceptable" that Mr Brown had been allowed to make such "rash promises" with the endorsement of all three UK party leaders, but with no mandate from Parliament.

He also criticised their commitment to to retain the Barnett formula - which ensures that public spending per head is higher in Scotland than in England - even though Holyrood is to be given new tax-raising powers.

"Such a lopsided constitutional settlement cannot last; it is already causing real anger across England. If not resolved fairly for all the constituent parts of the UK for the long term, it will fall apart," he said.

Deputy Prime Minister Nick Clegg also called for "wholesale top-to-toe constitutional reform" although he indicated the Liberal Democrats would not go as far as the Tories in curtailing the role of Scottish MPs at Westminster.

The Leader of the Commons, William Hague, who will chair a Cabinet committee to examine the issue, said that if the parties were unable to reach agreement, they would have to settle the matter at the general election.

"We have to discuss this with the other parties. If there is no consensus, then it is something which at the general election the parties will have to stake out their positions on," he said.

SNP Deputy Leader Nicola Sturgeon said she could think of "no greater privilege" than to take the top job but insisted the decision was "not for today".

She said: " Alex Salmond's achievements as SNP leader and Scotland's First Minister are second to none. He led the SNP into government and has given our country a renewed self confidence.

"Through policies such as the council tax freeze, free prescriptions and the scrapping of tuition fees, he has made a real difference for hundreds of thousands of Scots. And yesterday he inspired 1.6 million of our fellow citizens to vote Yes to independence.

"The personal debt of gratitude I owe Alex is immeasurable. He has been my friend, mentor and colleague for more than 20 years. Quite simply, I would not have been able to do what I have in politics without his constant advice, guidance and support through all these years.

"Alex's announcement today inevitably raises the question of whether I will be a candidate to succeed him as SNP leader.

"I can think of no greater privilege than to seek to lead the Party I joined when I was just 16. However, that decision is not for today. My priority this weekend, after a long and hard campaign, is to get some rest and spend time with my family. I also want the focus over the next few days to be on the outstanding record and achievements of the finest First Minister Scotland has had."