New Liberal Leader Stephane Dion told his party to think ahead to an election face-off with the Conservative party.

"The most exciting race in the history of our party is over,'' he told cheering Liberal leadership convention delegates in Montreal on Saturday after his come-from-behind victory to win on the fourth ballot.

"Let's get ready for the election.''

Dion becomes the party's 11th leader, succeeding Paul Martin, who stepped down after losing the 2006 federal election.

In speaking about the challenges to come, particularly with respects to the environment, Dion asked delegates to cast their minds back to 1993 when Canada was close to "bankruptcy."

He said the Conservatives at that time told Canadians to expect the same for the next decade. But it was the Liberals who turned the economy around.

The former environment minister, who made the environment a centrepiece of his campaign, indicated he would continue to do the same on the environment.

"Tonight in Montreal, I invite each of us to commit to tackle with the same determination the issue of sustainable development. We have a lot to do but a lot has been done."

In the next campaign, Liberals will offer Canadians a plan for a "just Canada, a prosperous Canada, a sustainable Canada," Dion said.

Robert Fife, CTV's Ottawa bureau chief, said the environment and social policy are two weak areas for the Conservatives.

Besides being careful to reach out to his former rivals, Dion spoke directly to Conservative Prime Minister Stephen Harper: "Stephen, if you're listening, we are counting the days until the next election."

Harper leads a minority government. Some speculate the government could fall as early as this spring, when Parliament votes on the 2007 federal budget.

"We have chosen a great leader," said Michael Ignatieff, who led on the first two ballots only to falter. "He will have my entire support."

He moved that the convention make the result unanimous. However, Ottawa Liberal MP David McGuinty, an Ignatieff supporter, described the result as a "the old second-choice routine."

The fourth-ballot results were 57.4 per cent support for Dion (2,541 votes). Ignatieff, the long-time expatriate academic and rookie MP who led through the first two ballots, captured 2,084 votes.

Ignatieff had been the front-runner throughout the campaign, which officially kicked off in early April.

However, his first sign of trouble materialized when his first-ballot support was about the same as it was during the Liberal delegate selection meetings in October. Pundits thought Ignatieff could get up to 35 per cent on the first ballot with the support of unelected delegates like MPs. Instead, he got 29.3 per cent.

Former Ontario NDP premier Bob Rae finished second in that round, while Dion and former Ontario cabinet minister Gerard Kennedy essentially tied for third, only two ballots separating them.

Dion vaulted into the lead on the third ballot. He had 37 per cent support, compared to 34.5 per cent for Ignatieff, the leader on the first two ballots.

Rae dropped out of the race after securing only 28.5 per cent on the third ballot.

Here are the third-round results, with the first- and second-ballot numbers in parentheses:

• Stephane Dion: 1,782 votes, 37 per cent (17.8; 20.8)
• Michael Ignatieff: 1,660 votes, 34.5 per cent (29.3; 31.6)
• Bob Rae: 1,375 votes, 28.5 per cent (20.3; 24.1)

The breakthrough

Dion saw his first jump in support after he received the backing of Gerard Kennedy, who placed fourth in the second ballot.

"I could have stayed on, there might have been sparks for me but frankly I am in this for a reason," Kennedy told reporters after walking over to Dion's camp.

"And my reason is for the Liberal Party to be the kind of party that it can be, and Stephane has this capacity and he is in a better position to do it than me," said Kennedy.

Kennedy appeared to take his supporters with him. Dion's vote total jumped by 908 in the next round.

Ignatieff never recovered. Rae declined to endorse a candidate, and CTV News analyst Brian Tobin, a former Liberal cabinet minister, said it appeared that Rae's supporters predominantly went to Dion.

Polling conducted by The Strategic Counsel for CTV indicated that Ignatieff and Rae were the most polarizing candidates in the election. Twenty-six per cent of those polled last week said they would never vote for Ignatieff, while 21 per cent said that about Rae. For Dion, that figure was only four per cent.

"It's clear there were a lot of forces at play. (People) were challenged by the courage of Michael's ideas," said Paul Zed, a New Brunswick MP and Ignatieff supporter.

He attacked Kennedy, saying, "To preach party renewal and to preach openness and then sign tthis separate backroom deal I think is kind of a little bit of jarring with the things he said he represented."

In an exclusive interview with CTV News' Lloyd Robertson, Dion said he had been speaking with Kennedy for months. "I thought it was likely that if Gerard had a choice to make between me, Michael and Bob, I had the best chance to be chosen."

Rae, who released his delegates after being eliminated, wasn't in the mood to second-guess. "Who knows. I'll let the historians figure it out. I'm quite happy," he said.

Dion as leader

CTV News analyst Anne McLellan, a former Liberal deputy prime minister, said Dion has a remarkable work ethic and gets by on just a few hours sleep per night.

When Dion is assigned a file, he studies it until he understands it inside out, she said.

She said he'll be a stern taskmaster as he doesn't have much patience for those who come to meetings unprepared.

While Ignatieff came under criticism for being hawkish on the war in Iraq and some verbal statements during the leadership race that were seen as gaffes, Dion will be the third consecutive party leader from Quebec.

On that issue, former Prime Minister Jean Chretien told CTV News: "I am against these labels. He is a Canadian like anybody else."

Chretien recruited Dion to serve in his cabinet as intergovernmental affairs minister after the 1995 Quebec sovereignty referendum. On his first day on Parliament Hill, Dion showed up with a beret on his head and a backpack over his shoulder.

"He has his own style. It's very different than others. But he's a serious man, he's completely convinced of what he's doing and is very determined," Chretien told CTV News.

"To do what he's done is unbelievable. It was a hell of a long shot."

Some francophone delegates had reportedly grumbled about the need for an anybody-but-Dion movement.

In Quebec, the Strategic Counsel poll put Dion behind Ignatieff in terms of the ability to win over Quebecers.

During his victory speech, Dion said he will fight with "conviction and clarity" the "right of free Quebecers to have their own country -- Canada. We will tell Quebecers they are Canadians, and we're right not to want to choose between these two beautiful identities."

Dion has been considered to be challenged in the area of charisma.

"Maybe you guys should revisit the way you see me," Dion told Robertson. "I would not have been able to win this race if I had not been able to connect with Canadians ... I have a capacity to communicate with passion and with reason."

With files from CTV News and The Canadian Press