There were five candidates and all members of the party were balloted using the Alternative Vote preference system.

The election was won by Charles Kennedy, who served as leader until his resignation in 2006.

The chief issue in the election was whether the party should continue its partial collaboration with the Labour Party, which had seen Ashdown and other senior Liberal Democrats appointed to a joint Cabinet committee on electoral reform.

Most of the candidates were to various degrees sceptical about this approach, with Simon Hughes the most hostile and Charles Kennedy the strongest defender of Ashdown.

Kennedy was generally favoured by the press because of his name recognition, which derived from his frequent appearances on light-hearted panel games on television.