(Update: 8:51, Ian): Apparently Keith Olbermann is reporting that Caroline Kennedy’s office is denying she has withdrawn her request.

(Update 12:04, JH) Ben Smith:  "[T]he prevalent theory is that Paterson put out word that Kennedy had turned it down in order to box her in."

. . .

Looks like Andrea Mitchell got played.  She recently reported that  David Paterson had made up his mind to choose Caroline Kennedy for Hillary Clinton’s Senate seat, but within hours of Clinton’s confirmation as Secretary of State, Kennedy has withdrawn her name from consideration.

What can you say?  Mitchell is not the first reporter to get badly spun by Kennedy’s handlers in a desperate last-ditch effort to salvage her chances, but it happened in a pretty embarrassing and high-profile fashion. 

I didn’t know how David Paterson was going to justify appointing Kennedy when virtually every poll showed an ever-widening gap between her and Andrew Cuomo as to whom New Yorkers would prefer.  The main argument for Kennedy, despite her inexperience and her pathetic roll out (courtesy of Lieberman/Netanyahu handler Josh Isay) was her name recognition and ability to hold the seat in 2010.  If Cuomo is beating her handily in the polls, that argument disappears.

Good for David Paterson.  He was getting steamrolled by the Kennedy machine over this from day one, but he never relented.  He played for time and sent signals through the press that he wasn’t all that enamored with Kennedy as a candidate, but the pressure on him to appoint her had to be unrelenting.  In addition to the Camelot fetishists like Ruth Marcus, there is no question that  Kennedy’s friends in the press and the high dollar donor world were putting the screws to him.  As someone who is up for re-election in 2010, he’s taking a considerable risk with his own fundraising challenges by passing her over.

Kennedy was a weak candidate from the start, and both New York and the Democrats stood to lose a lot of she choked in the Senate.  Teddy’s health crisis yesterday offers her a graceful way to exit the stage. If she truly does feel called to public service in politics, now is her chance to prove that she’s got what it takes by running for office.

David Paterson handled the whole situation quite artfully, and in the end did the right thing.  Color me impressed.