Mr Mulroney, whose poor standing with voters had become a liability for the Conservatives, announced he was stepping down after eight and a half years, allowing his party to renew its leadership before a general election in the autumn.
Ms Campbell, 45, was elected to parliament only five years ago and held the high-profile post of justice minister before moving to the powerful defence job in January. She has not confirmed she will stand, but political analysts believe she can revive the Conservatives' chances by attracting women's votes. 'Tomorrow I'll look at the lay of the land and if I have something to announce I'll announce it as soon as I have it,' she told reporters.
Ms Campbell is considered to be on the left of the party. She attracted widespread attention last year by posing for a photograph with bare shoulders. Her main rivals are the Trade Minister, Michael Wilson, the Communications Minister, Perrin Beatty, and the Environment Minister, Jean Charest.
Mr Charest, 34, the youngest cabinet member, is a Quebecois and a rising star in the party who could retain Conservative seats in the French-speaking province. Mr Wilson, 55, a former finance minister, has the backing of the Toronto business community. But he is handicapped by his close association with the unpopular economic policies that undermined Mr Mulroney, mainly a general sales tax and the free trade agreement with the United States that he helped to negotiate.
Mr Mulroney, a Quebecois of Irish descent, swept to power in 1984 in a landslide victory. But a severe recession and failure to resolve a separatist threat by Quebec have undermined his credibility. His opponents say he sold out to the US by signing the 1988 free trade agreement, which they blame for the worst rate of unemployment for eight years, with 1.5 million Canadians out of work.
The Prime Minister's future had been in doubt since the defeat in an October referendum of government proposals for constitutional reforms aimed at resolving the dispute over Quebec's desire for independence.