David Blunkett resigned as work and pensions secretary today, admitting the row over his failure to consult a watchdog about several extra-parliamentary jobs threatened to "embarrass" the prime minister. He was replaced this afternoon by cabinet office minister John Hutton.
Mr Blunkett's second resignation from the cabinet in less than a year almost certainly ends his career in frontline politics. Downing Street today said Tony Blair accepted the resignation "reluctantly", but that Mr Blunkett himself now felt that his position had become "untenable".
Mr Blair said Mr Blunkett left office "with no stain of impropriety against him whatsoever". He had been forced to quit because of the "frenzy" surrounding him, the prime minister said.
At a combative press conference immediately after PMQs, Mr Blunkett said: "I am guilty of a mistake and I am paying the price for it. I make no bones about saying that is my fault and I stand by it."
But while admitting he should have sought parliamentary permission for his commercial posts, he insisted that "having investments and holding shares in modern Britain is not a crime".
"When I say I have done nothing wrong, what I mean is I have actually not in office taken any steps, been involved in any discussions, had any talks, or misused my position in any way," he said.
"Everything that has been revealed has shown, with this one exception, that I have not committed any offence that will reduce Tony Blair's confidence in me as a minister."
Mr Blunkett lashed out at various elements of the media involved in his downfall, and promised to deal with the "complete lies" of Max Clifford. The publicist brokered the selling of a story by Sally Anderson, an estate agent who claimed to have had a relationship with the MP. Mr Blunkett today criticised several Sunday newspapers and did not dismiss suggestions that his phone might have been tapped.
A confused picture emerged of the exact timetable of Mr Blunkett submitting his resignation to the prime minister this morning.
Mr Blunkett said he had asked to see Mr Blair in Downing Street this morning, and that the prime minister had asked him to stay. While he was returning from Downing Street to Portcullis House to give evidence to a select committee, he said, he had finally decided that he could not continue in office.
"When you have been in politics as long as I have, you can smell and feel when it is time to step away and I felt that between Downing Street and Portcullis House," he said.
The first sign of imminent trouble came this morning when Mr Blunkett's appearance before a long-scheduled work and pensions committee was cancelled and he was instead seen arriving at No 10 Downing Street.
His resignation was confirmed at 11am, before Mr Blair stood up to pay tribute to his friend and colleague at midday at prime minister's questions.
The minister's first resignation, last December, came after a highly public affair with the Spectator publisher Kimberly Quinn, after which an independent inquiry found his office asked for her nanny's visa application to be fast-tracked.
This second resignation from the cabinet will almost certainly prove terminal to Mr Blunkett's remarkable career, which has seen him overcome blindness to become one of Labour's biggest hitters as first education secretary and then home secretary.
His current job was to force through reforms of both public pension provision and incapacity benefit, as well as overhauling the Child Support Agency.
Downing Street had defended him until last night, saying his failure to consult the advisory committee on business appointments over jobs with DNA Bioscience, Indepen consulting and a charity, ORT, was a "mistake", but did not affect his ability to do his job.
But it is thought that his failure to tell Mr Blair about the ORT job could have sealed his fate.
The prime minister's own judgment has now been called into question by the Conservative leader Michael Howard, for standing by his cabinet colleague for 72 hours, as well as bringing him back into the cabinet just five months after his first resignation.
Mr Howard said Mr Blair's authority was now "haemorrhaging".
Alan Johnson, the current trade and industry secretary, and one of the men who had been tipped to replace Mr Blunkett, today said merely that he was "very sad" to hear the news, and that his colleague was a "very fine fellow Yorkshire MP".
Mr Johnson refused to comment on what might happen in the cabinet reshuffle.
Clive Betts, Labour MP for Sheffield Attercliffe, acknowledged that Mr Blunkett - a close friend - had been "an architect of his own downfall" this time.
But he also argued that Mr Blunkett's failure to seek advice from the Advisory Committee on Business Appointments (ACBA) was "a small issue" for which he had apologised.
"I hoped people would have allowed him to do that and then to move on from the issue," he added.
Later today it emerged that Lucy Siddiqi, a director of DNA Bioscience, one of the firms at the centre of the row, had resigned as director because of the "intense media attention".
