At least according to the NY Post:
Caroline Kennedy tonight withdrew her name from consideration to replace Hillary Clinton in the U.S. Senate after learning that Gov. David Paterson wasn't going to choose her....
Very interesting...
If this is true (consider the source, too) then her stated concern for Ted Kennedy's health has the unfortunate appearance of a smoke screen to help Caroline save face. And, perhaps indirectly for Barack Obama, too, given his possible-but-hard-to-pin-down support of Caroline Kennedy to replace Hillary Clinton in the Senate.
Sources said the reason Paterson had decided not to tap the daughter of John F. Kennedy was her poor performances in media interviews and in in private sessions with various officials.
Kennedy's reasons for withdrawal seemed much different earlier today, as frontpaged by Kos and reported in the New York Times:
On Wednesday she called the governor, David Paterson, who is making the selection of who should succeed Senator Hillary Clinton. Her concerns about Senator Edward M. Kennedy's deteriorating health... prompted her decision to withdraw, this person said. Coping with the health issues of her uncle, with whom she enjoys an extraordinarily close bond, was her most important priority; a situation not conducive to starting a high profile public job.
And just to be clear here, these concepts are not mutually exclusive. I'm not suggesting that Caroline Kennedy isn't gravely concerned about her uncle. This could be merely circumstantial, or could it be a solid PR move along the lines of "you can't fire me, I quit." Whatever the case, it is my hope that the people of New York State get the progressive senator they deserve to replace Clinton.
That said, it now appears as if Andrew Cuomo is in the driver's seat for the appointment.
UPDATE: As of 6:11 EST, the story on the MSNBC web site now has a subhead that reads (in reference to what was reported on Countdown):
But sources tell NBC News that there may been a miscommunication
UPDATE #2: Has there been a formal denial by a Kennedy representative? As of 9:18 EST, the withdrawal story is still up on CNN.com:
Multiple sources told CNN that, as of about 8 p.m. Wednesday, she had not yet informed New York Gov. David Paterson of her decision (to withdraw).
UPDATE #3: New from the NY Daily News web site (9:14 EST):
A family source said cousin Kerry Kennedy spoke with both Paterson and Caroline Kennedy's political consultant, Josh Isay, and neither was aware she was bowing out.
FINAL UPDATE: It looks like there won't be any definitive answers tonight on whether Caroline Kennedy is staying in or dropping out, and if she's dropping out, why. The fallout from this will be interesting, whichever direction it follows. Summary at Raw Story.