The AP reports:

NEW YORK — Conservative Party candidate Rick Lazio withdrew from the race for New York’s governor on Monday, a decision that helps the chances of the Tea Party candidate who beat Lazio in the Republican primary.
Lazio told The Associated Press that he wants to continue to influence the race and bring a workable job-creation program into a contest he says has devolved into name-calling between Republican Carl Paladino and Democrat Andrew Cuomo.
Polls show Paladino rising against the once seemingly unassailable Cuomo, but the latest survey showed Lazio taking 8 percent of voters, most of whom would likely go to Paladino and cut into Cuomo’s lead, said Marist College pollster Lee Miringoff.
[. . .]
With Lazio’s departure, the Conservative Party has until Tuesday to put in a substitute candidate. The party’s candidate for governor must get 50,000 votes to maintain its automatic ballot line for the next four years and the influence that provides to political discourse in New York.

But Lazio isn’t ready to endorse Paladino yet:

“I believe strongly that Andrew Cuomo cannot bring change, but I remain unconvinced that Carl Paladino will bring the improvement that New York need,” Lazio said.

Interestingly, Sarah Palin embraced the decision, tweeting:

Rick Lazio: u r Commonsense Conservatives (& other freedom-loving NY’rs) hero today. Thanks 4 selfless act 2 allow your great state 2 thrive