Ron Davies talks to the BBC's John Sergeant about his resignation

Mr Davies became the first member of Tony Blair's Cabinet to resign admitting a "serious lapse of judgement" following an incident near Clapham Common where he met a stranger and was later robbed at knifepoint.

He has been replaced at the Welsh Office by Alun Michael, a Home Office Minister who will now be in charge of promoting next May's elections to the Welsh Assembly.

Mr Davies was favourite to become the First Secretary of the Welsh Assembly after winning a ballot earlier this year to head the Labour group in the assembly.

He has yet to resign as leader of the party in Wales but is believed to be under enormous pressure to do so.

BBC Chief Political Correspondent John Sergeant talks exclusively to Ron Davies after his resignation

The robbery was reported to the police by Mr Davies, who also had his car stolen.

He said: "I did something very foolish. I wish, therefore, in the interests of the government to tender my resignation, forthwith."

Blair's view

A Downing Street insider rejected any suggestion the matter related to a sex scandal. He said there was "no sexual activity or relations" that led to the resignation.

The prime minister's official spokesman said: "For a Cabinet minister to meet a complete stranger in a public park and then drive round south London - he took the view and the prime minister takes the view that it does mean a lapse of judgement."

There were no Cabinet papers in the car. Mr Davies' wallet and his personal mobile telephone were also stolen.

The new Welsh Secretary Alun Michael

Mr Davies has issued a statement explaining his action.

"After driving back from Wales last night, I parked my car near to my home in south London," it said.

"I went for a walk on Clapham Common. Whilst walking, I was approached by a man I have never met before who engaged me in conversation. After talking for some minutes, he asked me to accompany him and two of his friends to his flat for a meal.

"We drove in a car to collect his friends, one male, one female. Shortly afterwards, the man produced a knife and together with his male companion robbed me and stole my car, leaving me standing at the roadside.

"I reported this matter immediately to the police."

Mr Davies saw the prime minister on Tuesday morning. Mr Blair later wrote in a letter: "Given the situation, you described, I accept your decision to resign. I do so with a real sense of sadness. You have done an excellent job for the people of Wales."

Shock and 'tragedy'

The president of Plaid Cymru David Wigley MP told BBC News Online: "The news of Ron's resignation was an absolute shock to us all. I have no doubt it must be a serious incident otherwise he would not have resigned.

"It is a personal tragedy for him and for his family and it is a tragedy for Wales."

Dr Liam Fox MP gives the Conservative reaction

The Conservative constitutional affairs spokesman, Dr Liam Fox, told BBC News Online: "The only political issue arising from this, is that given he has made this judgement in relation to the Cabinet, I wonder whether he feels he can continue to lead Labour into the Assembly elections."

Liberal Democrat MP for Montgomeryshire Lembit Opik says he is sorry to see Mr Davies go

The Liberal Democrat MP for Montgomeryshire, Lembit Opik, said Mr Davies' departure had come as a "complete surprise" and he was sorry to see his political opponent go.

Supporters of Mr Davies argued he should not step down as Labour leader in Wales.

'Let Wales judge'

Gareth Hughes, a local party member, said it would be a tragedy if he were forced to abandon the post.

"He's delivered something even Lloyd George failed to deliver for Wales - a measure of home rule," he said.

Kevin Morgan: Ron Davies need not step down

Professor Kevin Morgan, a friend and colleague of Mr Davies, who chaired the Yes for Wales campaign on devolution, said people should and would judge the beleaguered MP on his work for Wales.

"It doesn't necessarily follow that because he's resigned from the cabinet, he has to resign as Labour leader in Wales.