The News of the World phone-hacking scandal forced Andy Coulson to resign for a second time yesterday, the former editor quitting his Downing Street post as David Cameron's director of communications.
Mr Coulson asked to see the Prime Minister on Wednesday in his Downing Street office and told him that he could no longer carry out his job effectively because of the continuing pressure of allegations against him. Mr Cameron accepted his resignation.
His departure opens the way for News International to admit that phone hacking at its Sunday red-top newspaper was more widespread than it has previously acknowledged.
The company is conducting an internal investigation into the affair after suspending its executive editor Ian Edmondson before Christmas. It also faces a string of legal actions from celebrities and politicians who claim their phones were targeted by the paper.
There are concerns at the top of the company that its chief executive Rebekah Brooks could be drawn into the scandal. She was Mr Coulson's predecessor as editor at the News of the World before moving to become editor of The Sun in 2003. Senior executives pray that Mr Coulson's resignation will take some of the sting out of the story.
But friends who have spoken to Mr Edmondson say he feels “hung out to dry” by News International. Any information he has about what went on at the News of the World under Mr Coulson could be hugely embarrassing.
“It is going to be increasingly difficult, if not impossible, for Andy Coulson to convince anybody that he didn't know what was going on,” a friend said.
Group chairman Rupert Murdoch is in London this week and passed up a chance to go with his wife to a state dinner in Washington, hosted by President Barack Obama for the Chinese premier Hu Jintao. White House gossips wondered why he wasn't there.
News International declined to say what Mr Murdoch has been doing in London, but it is thought to relate to News Corporation's troubled attempts to take full control of BSkyB, which could be subjected to a competition inquiry.
Last night, News International insisted that Mr Coulson's departure had come as a surprise to executives there.
A Downing Street source said: “Andy just increasingly felt that he could not do his job with this going on at the same time. He was spending hours of his day trying to respond to stories about him.
“He had to take a week off before Christmas to prepare and give evidence in the Tommy Sheridan trial. One day he left his home at 4.30 in the morning to avoid the photographers who he knew would be outside. It became too much.”
Mr Coulson's departure is a political headache for Mr Cameron. He relied on him both for his intimate knowledge and connections in the tabloid media as well his working-class ‘Essex Boy’ background — in contrast to the more privileged upbringings of some other in the No 10 team.
Last night speculation grew over who might replace Mr Coulson. Contenders include George Pascoe-Watson, the former political editor of The Sun, Ian Birrell, the former deputy editor of The Independent, and Guto Harri who currently works as a spokesman for Boris Johnson.
It is understood Mr Coulson will not leave Downing Street for another few weeks to give time for Mr Cameron to find his successor.