London's mayoral election next year will be a rematch between Boris Johnson, Ken Livingstone and Brian Paddick, after the former Scotland Yard deputy assistant commissioner was selected as the Liberal Democrats' candidate for the second time.

Paddick, who came third in the 2008 mayoral election when Johnson ousted Livingstone after two terms, was declared the winner after a four-horse race in which the former MP Lembit Opik was eliminated in the first round.

Opik lost the safe Lib Dem seat of Montgomeryshire in the 2010 general election. On Friday, in an election run on the single transferrable vote, he secured just 252 votes, coming fourth behind London councillor Brian Haley, with 316.

Paddick narrowly won on second preference votes (1,567), with Mike Tuffrey, a member of the London assembly, close behind on 1,476. About 6,000 London party members were eligible to vote.

Paddick, who had said he was undecided about standing when he put in his nomination papers in June, has pledged to fight for a "fair deal" for Londoners, to protect local community policing and to hold down bus fares.

He thanked Liberal Democrat members "who placed their trust and confidence in me to be their candidate for mayor of London – I won't let you down".

Opik, who had previously claimed that "forces within the party" were trying to prevent him standing, conceded defeat before the final result was announced. He told the Evening Standard: "I stood because I felt the Lib Dems desperately need to reach out beyond their traditional voters. Boris and Ken are celebrity politicians. I fear the party doesn't grasp the implication of this." He was not quitting. "I'll be back," he said.

Some in the party are resigned to next year's election being a Johnson-Livingstone rematch, and see the mayoral election as a way of boosting the party's profile for the London assembly elections taking place at the same time. Currently it holds just three seats out of 25.

Nick Clegg, the Lib Dem leader and deputy prime minister, said Paddick provided Londoners with a "real, credible alternative" to Johnson and Livingstone.

"Brian's experience is exactly what London needs right now. Whether dealing with the aftermath of the riots or phone hacking and corruption in the Metropolitan police, Brian has shown in recent weeks that he has the authority and leadership London needs."The phone hacking scandal that rocked News International, the Metropolitan police and the political establishment is likely to surface in the 2012 contest. Paddick, whose phone was hacked by the now defunct News of the World, is among a group of public figures who have sought permission for a judicial review of the Met's handling of the phone hacking scandal.

Johnson, the incumbent mayor who declared his intention to seek a second term a year ago, came under fire over the summer for having dismissed reports that News of the World's use of phone hacking was more widespread than first thought as "codswallop" – a claim that turned out to be wide of the mark.

Livingstone, who was the first to declare his intention to stand again, was mayor when the original police investigation was conducted in 2006.

Paddick, who retired from the police in 2007 after 30 years of service, told the Evening Standard on Friday that reformed gang members should go into school to warn children of the dangers of getting involved in violent crime, after the recent riots in the capital raised fears about violent young people.