I see it as a matter of honour to stand aside

Lord Wakeham

A former Conservative energy minister, Lord Wakeham joined Enron as a non-executive director in 1994.

He has travelled to New York to meet lawyers acting for himself and other non-executive directors.

There are 14 investigations under way in Washington over Enron's multi-billion-dollar bankruptcy - the biggest corporate collapse in history.

Enron is facing allegations of false accounting on a massive scale.

Lord Wakeham is a qualified accountant and reportedly earned �80,000-a-year from Enron.

It is likely investigators will want to talk to him about his role as a member of the company's audit committee, which was supposed to protect shareholders interests.

'Co-operating'

He has not so far been summoned to give evidence at a formal hearing but he says he is actively co-operating with inquiries.

It is possible the peer could face costly legal action from some of the employees and investors who have lost money through the affair, although the prime focus is on other figures.

US trade unions are also reportedly threatening to mount a formal complaint against Lord Wakeham to the Institute of Chartered Accountants in England and Wales.

Robert Pinker is taking charge of the PCC

While such questions remain, he has decided to step down from his PCC job to protect the body from damaging speculation.

In a statement announcing the move he said: "As chairman of the Press Complaints Commission for the past seven years, I am only too aware of the damage that can be done to individuals and institutions that are thrust into the public spotlight.

"Since the collapse of Enron, I have been unable to make any statement or undertake any interviews on the subject for legal reasons. I am conscious that some see this position as incompatible with the chairmanship of the commission.

"I am very proud of everything we have achieved at the PCC and do not wish it to be damaged by continuing short-term speculation."

His moves follows calls by a number of MPs for Lord Wakeham to stand aside while the Enron investigation continues.

Moore says Wakeham should stand aside permanently

Professor Robert Pinker, who has served as PCC privacy commissioner for the past seven years, has been appointed acting chairman.

The chairman of the Press Standards Board of Finance Limited, Sir Harry Roche, paid tribute to Lord Wakeham.

"The manner and timing of the announcement underlines his sense of integrity and honour," he said.

Those qualities - "along with the shrewdest of political minds, and an unswerving commitment to self-regulation" - had made him an "outstanding PCC chairman".

'New chapter needed'

Charles Moore, editor of the Daily Telegraph, said Lord Wakeham was right to step down because he could not answer questions on Enron.

But the Telegraph editor, whose paper was criticised last week for its report of Euan Blair's university plans, hoped the move would be permanent so there could be a new era for the commission.

He told BBC News: "There was a somewhat collusive relationship between some of the newspapers and the PCC.

"It's become too much involved, too much part of the story, rather than standing back and giving fair adjudications."