Spanish Prime Minister Jose Luis Rodriguez Zapatero has announced he will not seek a third term in office at general elections in 2012.

His decision opens a process to elect his successor at the helm of the Socialist Party.

Mr Zapatero said today he had decided to limit his time in office to two terms because it was the right thing for the country, his party and his family.

"I will not be a candidate in the forthcoming general elections," he told a party meeting at its headquarters in Madrid.

Zapatero was elected to office in 2004 in the wake of terror attacks on Madrid's trains, that left 191 dead and 1,800 injured, and a wave of public disapproval at the previous government's involvement in the Iraq war.

At the time, Spain's economy was one of the most dynamic in Europe having recorded continuous growth for around a decade.

But the international financial crisis has dogged Zapatero's second term and immersed Spain in debt and a eurozone-high unemployment rate of 20%.

The Socialist Party faces regional and municipal elections in May and then must build toward nationwide general elections with a new candidate at its head.

The most likely candidates are current Deputy Prime Minister and Interior Minister Alfredo Perez Rubalcaba and Defence Minister Carme Chacon, who could become Spain's first female premier if elected.