Mr Davies resigned from his Cabinet post after admitting "a serious lapse in judgement" leading to the crime.

The BBC's Emma Udwin: Mr Davies's account of crime begs more questions than it answers

He said he had been robbed at knifepoint and had his car stolen after going to Brixton with a 50-year-old black man with dreadlocks he had met on Clapham Common in south London on Monday night.

Mr Davies, the first Cabinet minister to quit Tony Blair's government, described in a statement how the robbery happened.

Speculation grows

"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.

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

"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."

Police said the dreadlocked man was wearing a multi-coloured horizontally-striped cloth jacket.

The two other suspects were described as a 30-year-old black man and a black woman in her 20s.

The man was described as 5ft 9in tall, clean shaven with short black hair and wearing a stony grey-coloured track suit; the woman as 5ft 3in tall.

Clapham Common: Certain areas notorious as gay pick-up points

Speculation is growing over the mystery of why Mr Davies had allowed the man into his car and agreed to go back to a stranger's flat with three people he did not know.

Certain areas of Clapham Common are notorious as meeting spots for gay men looking for sex, but Mr Blair's official spokesman said Mr Davies had denied there was any kind of sexual encounter.

Ben Bradshaw: It does not sound like a gay escapade

In his only public comment, Mr Davies told the BBC: "Isn't it enough to say that as a member of the Cabinet I am accepting that I was guilty of an error of judgement?

Labour MP Ben Bradshaw told the BBC: "I think a trip down to Brixton with a Rasta and a few mates does not sound like a gay escapade to me."

The new Welsh Secretary Alun Michael

Alun Michael has been named as the new Welsh secretary. He was previously a Home Office minister.

Prime Minister Tony Blair said he accepted the resignation with a "real sense of sadness".

Mr Davies had done an "excellent job for the people of Wales".

A question mark now hangs over whether Mr Davies can continue to lead Labour into the Welsh Assembly elections.

'Hard-working and capable'

He was responsible for leading the government's successful referendum campaign for a Welsh Assembly after being appointed Welsh secretary following Labour's return to power in 1997.

He is expected to meet members of his Caerphilly constituency party on Friday night.

Conservative constitutional affairs spokesman Nigel Evans said: "If the error of judgement is sufficiently serious for him not to wish to embarrass the Labour Party in Westminster, I assume he would not wish to embarrass the people of Wales by remaining as leader of the Welsh Labour Party."

But Mr Davies' constituency chairman Elwyn Morgan said he was certain support for their MP would remain strong.

He said: "I have worked closely with Ron since he first went into Parliament in 1983 and he has always been tremendously capable and hard-working, particularly since the general election.

"I think it would be a dreadfully sad day if, after having successfully steered the devolution Bill through Parliament, Ron wasn't there to see the Welsh Assembly implemented."