The Unite union official at the centre of the Grangemouth dispute has resigned from his job at the plant saying he was treated as the "enemy within" by management.
Stevie Deans had been suspended while Ineos investigated his involvement in the row over the selection of a Labour candidate in the Falkirk constituency.
Management were looking at claims he used company time for union business.
His treatment led to Unite to vote for strike action which led to last week's shutdown of the plant.
At a union meeting last night Mr Deans told members: "Ineos Grangemouth is now entering a new period, and my own situation would only prove to be a distraction, and would cast a shadow over what we all must hope will be a prosperous long-term future for the plant."
Mr Deans and would-be Labour MP Karie Murphy were both suspended by the Labour Party as it investigated allegations of candidate-selection fixing in the Falkirk constituency earlier this year.
The investigation was closed last month after key witnesses withdrew evidence suggesting that they had been recruited to join Labour as part of a drive by Unite to cram the constituency party with supporters who would back its favoured candidate in a selection battle.
Both Mr Deans and Ms Murphy were reinstated as Labour members, b ut Ineos proceeded with its own investigation into Mr Deans's activities, prompting Unite members at the petrochemical site to ban overtime and opt to take other industrial action at the end of last month.
Unite said that Mr Deans wrote in his resignation letter to Ineos that he was being treated as the "enemy within" after 25 years of working at the plant, and he accused the company of leaking emails to the media to "smear his reputation".
He told the Unite meeting: "The hurt to my family is unforgivable and I will not allow management to take away my dignity and self-respect any further."
The union said it is considering "what steps can be taken on Mr Deans' behalf" without diminishing its commitment to the survival plan workers signed with Ineos last week.
Earlier yesterday Ineos announced that Mr Deans had resigned.
A statement said: "The company has conducted a thorough investigation into Mr Deans' activities over the last 18 months and made Mr Deans aware of these findings last week.
"Mr Deans requested an additional five days prior to the final disciplinary hearing to allow him time to provide any further relevant information.
"The company was due to meet with Mr Deans again tomorrow but has now received his resignation."
Mr Deans is the Falkirk Labour party chairman and the candidacy for the constituency became available after current MP Eric Joyce announced he would not stand again.
The Sunday Times reported that it had seen emails suggesting that the letter retracting the witnesses' evidence in Labour's investigation was written by Unite officials and approved by Mr Deans.
The emails - sent from a company address - were reportedly obtained by lawyers working for Ineos during the dispute with Unite, as the firm sought to prove that Mr Deans was spending work time on political activities.
They reportedly included a draft of the retraction letter which was sent to Mr Deans for him to get it signed by Michael and Lorraine Kane, the witnesses who initially complained to the party against him and Ms Murphy.
The Sunday Times reported that a dossier of around 1,000 emails has been handed to police in Scotland, who were initially called in by Labour when allegations of irregularities emerged in July but determined that there was not enough evidence of wrongdoing to launch an investigation.
Commenting on Sunday, a Unite spokesman said: ''Unite was the subject of entirely unjustified attacks in relation to the Labour parliamentary selection in Falkirk. Both the Labour Party and Police Scotland investigated the issue and found that neither the law nor the party's rules were broken by the union.
''The email exchanges, apparently leaked by an employer for its own purposes, do nothing to change that.''
Ed Miliband was urged to consider reopening Labour's inquiry at the weekend, after the release a dossier of apparent new evidence.
Commenting on Mr Deans' resignation, Conservative Party chairman Grant Shapps said: ''Stevie Deans' resignation is yet another reason why Ed Miliband must finally act. He must publish the internal Labour inquiry into Falkirk.
'Ed Miliband should also open a new inquiry: to investigate properly the initial allegations of selection rigging, and Unite's attempt to subvert the internal inquiry.''