It has been a privilege to serve the people of Scotland as a minister in the Scottish Executive and as first minister

Henry McLeish

Mr McLeish had been expected to survive as he had secured the support of Labour and Liberal Democrats MSPs.

However, it is believed that fresh revelations over a sixth sub let of his Fife office led` to his decision to step down from the post.

Two days earlier he had admitted receiving �36,000 in rent from five companies while a Westminster MP without registering the income with the Commons authorities.

He had already agreed to repay �9,000 to the fees office and said he was prepared to pay back the remaining cash if necessary.

But it is understood that on Wednesday evening he learned of the discovery of a sixth sub let to a charity, which had not been disclosed to him by those investigating the matter.

Cabinet consultation

It is thought that this development proved to be the key to his resignation.

Mr McLeish spent Wednesday night at his official residence in Edinburgh and took his decision after consultation with Cabinet colleagues and advisors.

However, it was being stressed that the decision was his and his alone - and had been taken to benefit the Labour party and the parliament as a whole.

MSPs were informed of the decision by Parliament Minister Tom McCabe as they gathered for Thursday morning's debate. Business was then suspended.

Tom McCabe announces the decision to MSPs

In his letter to Presiding Officer Sir David Steel, Mr McLeish said: "I am writing to advise you formally that I have today written to Her Majesty, in accordance with Section 45(2) of the Scotland Act, to tender my resignation as first minister.

"I intend to make a personal statement to that effect in the Scottish Parliament today.

"It has been a privilege to serve the people of Scotland as a minister in the Scottish Executive and as first minister.

"It is my intention to continue to serve my constituents in Central Fife as their member of the Scottish Parliament."

Mr McLeish's resignation will spark a 28 day contest to find his successor.

Deputy First Minister Jim Wallace is likely to fill the role on a caretaker basis until Labour choose a successor.

The row centred around Mr McLeish's Fife office

Education Minister Jack McConnell is already being tipped as the favourite to suceed Mr McLeish, who he challenged for the first minister's post following the death of former leader Donald Dewar.

Political reaction to Mr McLeish's decision was swift, with Prime Minister Tony Blair paying tribute to the first minister.

"It is a great shame that Henry's career as first minister should end in these circumstances," he said.

Scottish Tory leader David McLetchie said: "Henry McLeish has done the right thing in tendering his resignation. I commend him on that."

SNP leader John Swinney added: "I hope he is personally bearing up under the strain of all of this and obviously we will hear more this afternoon."