Susan Rice has asked President Barack Obama not to pick her as his next secretary of state, after becoming a lightning rod for Republicans over the raid on the US consulate in Benghazi, Libya.
Rice, currently US envoy to the United Nations, is a longtime member of Obama's inner circle and had been a favourite to succeed Hillary Clinton as the top US diplomat.
But her role as a top administration defender over the attack which killed the US ambassador to Libya on September 11 drew her into a furious row with Republicans keen to dent Obama after his re-election victory.
"If nominated, I am now convinced that the confirmation process would be lengthy, disruptive and costly, to you and to our most pressing national and international priorities," Rice said in a letter to Obama on Thursday.
Rice told NBC, which first reported her decision, that she was determined not to detract from the crucial first months of Obama's second term -- even though she had not even been nominated as secretary of state.
"We're talking about comprehensive immigration reform, balanced deficit reduction, job creation -- that's what matters," Rice said.
"To the extent that my nomination could have delayed or distracted or deflected, or maybe even (made) some of these priorities impossible to achieve, I didn't want that."
Rice's move came amid strengthening indications that Obama is making progress in naming his new national security team. Sources said Republican former senator Chuck Hagel could become secretary of defense.
The White House, rowing over taxes and spending with Republicans, had pragmatically concluded the political capital needed to confirm Rice in the Senate could be better spent elsewhere.
But some observers may sense weakness in Obama's decision not to fight for Rice against opposition from Republicans -- including the man he defeated for the White House in 2008, Senator John McCain.
Obama, who aides say is philosophically and personally close to Rice, issued a statement condemning the "unfair and misleading attacks" on her and said she would stay on as UN ambassador with a spot on his cabinet.
The president and his UN envoy will meet Friday at the White House.
Republicans pounced on Rice after she said on September 16 that the Benghazi attack was a "spontaneous" reaction to an anti-Muslim video, using CIA talking points she now admits were wrong.
Extremists linked to Al-Qaeda are now blamed for the attack and Republicans charge the White House did not want to own up to a terror attack weeks before the presidential election.
Rice reiterated in a Washington Post editorial Thursday that she had made no attempt to mislead Americans. But she was not under fire for Benghazi alone.
There were whispers over her apparently acerbic character, and there was criticism over her role in US diplomacy to Africa when she served in Bill Clinton's administration.
Democratic Senator John Kerry is now the favourite for the post, though officials say no personnel announcements are imminent.
Kerry, the defeated 2004 Democratic presidential candidate, will not comment on his chances, but issued a warm statement empathizing with Rice.
"As someone who has weathered my share of political attacks and understands on a personal level just how difficult politics can be, I've felt for her throughout these last difficult weeks," Kerry said.
McCain was one of Rice's fiercest critics.
"Senator McCain thanks Ambassador Rice for her service to the country and wishes her well," read a statement from his office.
"He will continue to seek all of the facts surrounding the attack on our consulate in Benghazi that killed four brave Americans."
Rice's move throws the race to succeed Clinton, who has said she will not serve in Obama's second term, wide open.
Clinton praised Rice as "an indispensable partner over the past four years."
And Rice told her followers on Twitter that she was a "fighter" who still had work to do for the American people, amid speculation that she could eventually be named as Obama's national security advisor.
Obama is meanwhile considering Hagel for defence secretary to succeed Leon Panetta, sources said. The two men have been close since they served together in the Senate.
Hagel, a decorated combat veteran who branded then president George W. Bush's Iraq troop surge strategy the worst foreign policy blunder since Vietnam, served two terms as a Nebraska senator.
A decision by Obama to pick a Republican to lead the Pentagon would be seen as an attempt to show bipartisanship, although Hagel is seen as a centrist on foreign policy who has broken with his party on several key issues.
The president must also find a new head for the CIA.