Jess Phillips has dropped out of the Labour leadership contest, leaving four candidates in the race to succeed Jeremy Corbyn.
In a video message to supporters, the Birmingham Yardley MP argued the next leader had to be able to unite the whole Labour movement.
She said she had to “be honest” with herself – “that person is not me.”
Lisa Nandy’s campaign has received a major boost after she won the backing of the GMB union.
Announcing its decision to endorse the Wigan MP, the union’s general secretary, Tim Roache, said she was “a breath of fresh air in the debate over Labour’s future”, and “got the scale of the challenge” facing the party after its fourth election defeat in a row.
The endorsement increases the chances of Ms Nandy making it to the final stage of the contest, joining Sir Keir Starmer who has already qualified to get on the ballot.
Ms Nandy – who already has the support of the National Union of Mineworkers – said she could “not be more proud”, and the next leader’s challenge was to “recover our ambition and inspire a movement”.
The other candidates still left in the leadership race are shadow business secretary Rebecca Long-Bailey – who has been tipped to get the backing of the Unite union later this week – and shadow foreign secretary Emily Thornberry.
Ms Phillips missed the hustings organised by the GMB earlier on Tuesday, prompting speculation that her campaign was in trouble.
She had yet to receive any nominations from trade unions, affiliate bodies or local parties.
Confirming her exit, the 38-year old Ms Phillips said Labour needed a leader “who can unite all parts of our movement, the union movement, members and elected representatives”.
“In order to win the country, we are going to have to find a candidate, in this race, who can do all of that, and then take that message out to the country. A message of hope and change, that things can be better.”
She thanked all those who had pledged their support for her, particularly Jewish members of the party who she said she would continue to stand up for.
“I will always speak out and I promise that we will change the problems in our party that we have seen. I’m going to go out into the country and join the fight back.”