Mr Lau, 71, has served seven terms as chairman of the rural consultative body, which represents the interests of indigenous villagers in the New Territories.

At a kuk meeting yesterday where he was re-elected unopposed, Mr Lau said: 'Many people have long told me, 'if you quit, the kuk would fall apart' ... But I have a responsibility to pass on the job and prepare for the changing of the guard while my mind is still clear.

'My biggest consideration is to give enough time for people with ambition and ability to make adequate psychological preparation and build their teams for the election.'

Mr Lau, who also represents the body on the Legislative Council, said whether he would run in next year's Legco election was 'another issue'.

Mr Lau, who has been kuk chairman for more than 30 years, is the most powerful and most respected rural figure. He has long served as a conduit between villagers and the government, which has relied on him to implement policies and defuse dissent.

His announcement he will step down in 2011 is an opportunity for ambitious rural leaders. Mr Lau said he would keep a close watch on potential candidates and warned against any internal conflict.

The kuk's two vice-chairmen, legislator Cheung Hok-ming and Daniel Lam Wai-keung, are considered frontrunners to succeed Mr Lau.

Mr Cheung, who is considered a hard-working pragmatist, said yesterday he would focus on expanding the kuk's influence.

The flamboyant Mr Lam, who stirred controversy and had to apologise to fellow kuk members this year when he made indiscreet comments about Mr Lau in a magazine interview, said it was 'too early' to talk about his future.