I want to remove myself from the countless stories and controversies of feuds and divisions that have surrounded me.

Peter Mandelson

Tony Blair accepted the resignation on Wednesday morning. It was the second time his close political confidant has been forced to quit the cabinet in disgrace since Labour came to power in 1997.

Mr Mandelson, speaking outside 10 Downing Street just after 1330GMT, said he did not accept that he had acted "improperly in any way" over the passport application of controversial Indian billionaire Srichand Hunduja.

He went on: "I do accept however that when my office spoke to a Sunday newspaper at the weekend I should have been clear that it was me personally, not my official, who spoke to the Home Office minister."

Mr Mandelson said he was also resigning to "lead a normal life", saying "constant media pressure has dogged me for years".

He told reporters he would be taking his final Northern Ireland questions in the Commons on Wednesday afternoon, stay for prime minister's questions and then formally leave the government.

Downing Street summons

Earlier the prime minister had summoned Mr Mandelson to Downing Street to "establish the facts" of his involvement in the passport saga.

Mr Mandelson had come under increasing pressure over the issue since the weekend following claims he pulled strings to help Mr Hinduja secure a UK passport after he pledged £1m in sponsorship for the Millennium Dome while Mr Mandelson was in charge of the project.

Mr Mandelson was first forced to quit from the cabinet in 1998 after failing to disclose that he had secretly received a £373,000 loan from his then fellow minister Geoffrey Robinson to buy a house in London.

Mr Mandelson's second resignation has sent shockwaves across Westminster and through the Labour Party, coming as politicians prepare for the next general election.

Although the passport row was regarded as damaging there were few who believed it would lead to Mr Mandelson being forced out of the cabinet immediately and for an unprecedented second time.

Denial

Mr Mandelson originally denied playing any role in Mr Hinduja's application for a UK passport.

Mr Hinduja had had his application refused but, just after paying £1m towards the Dome, he asked Mr Mandelson whether he could apply again

On Monday, Downing Street said that Mr Mandelson's private secretary had made a telephone call to the Home Office.

Mike O'Brien: The former immigration minister was approached

However, by Tuesday the story had changed and the prime minister's spokesman reversed Downing Street's previous denial to instead admit that Mr Mandelson had called Home Office Minister Mike O'Brien to discuss the application.

'Innocent inquiry'

Mr Mandelson insisted there was "no wink or nudge" involved in the "innocent inquiry" he made on Mr Hinduja's behalf.

On Wednesday morning, the prime minister's official spokesman refused to answer journalists when they asked if the prime minister continued to have confidence in Mr Mandelson.

He also declined to say whether he believed Mr Mandelson would be Northern Ireland secretary by the end of the day.