As DeutscheWelle reports, this reflects a rapid decline from what had appeared at the time a major political triumph just 18 months ago, leading to the formation of a centre-right Coalition government.
Westerwelle has been a polarizing political figure since assuming office in a coalition government with Chancellor Angela Merkel's Christian Democrats (CDU).
In the federal elections in September 2009, the Free Democrats won a historic 14.6 percent of the vote.
However, the party's record success began to crumble as Westerwelle's public image was tarnished in a series of political controversies.
The party now believes it needs a significant change of direction to regain credibility and popular support.
Although successors have not been officially announced, Health Minister Philipp Rösler and General Secretary Christian Lindner are considered likely candidates.
Rösler has said that the FDP's future as a viable political party depends on regaining credibility with the German people.
"It all depends on winning back lost credibility," Rösler said in an interview with the German tabloid Bild on Sunday. "We have to care more for the reality of people's lives."
Lindner has said that both a change in content and personnel will be necessary to bring the FDP back to form, saying it was "essential to gain credibility, competence, respect and sympathy with new faces."
The FDP are the sister party of the Liberal Democrats, who are preparing to fight national elections in Scotland and Wales, and local government elections, on May 5th.
Mr Nick Clegg was not available for comment.