John Sergeant: "Labour government is no longer immune to political scandal"

Mr Davies quit the cabinet after being robbed near Clapham Common and having his car stolen.

Police arrested and questioned three people in connection with the robbery. They were later released on police bail without charge.

Both the media and MPs are demanding to know exactly why the Caerphilly MP resigned.

BBC Wales Correspondent Wyre Davis assesses the reaction to Ron Davies' resignation in Wales

Perhaps more importantly, Mr Davies will face questions from his constituency party at their fortnightly meeting on Friday.

Scotland Yard say they have not ruled out speaking to him again.

A spokesman said: "We are not prepared to discuss details because this is an ongoing inquiry. But Mr Davies will be assisting police."

Mr Davies is still deciding whether to quit as Labour leader in Wales but sources close to him say he still wants to carry on as prospective leader of the Welsh Assembly.

Political Editor Robin Oakley: Curious questions remain

The Secretary of the Caerphilly Labour Party, Derek Lamb, refuses to divulge Mr Davies' whereabouts but said he had been in touch.

Mr Lamb said: "It is obviously a very sad time, but Ron is okay. He just wants to be with his family."

"Ron was very clear in the brief conversation that we had that he would like to carry on as far as the assembly is concerned."

We are fully behind our MP, says Derek Lamb

Downing Street has emphatically denied any sex or drugs scandal but admits the facts are "bizarre".

The prime minister's official spokesman said: "There is no evidence of any gay link or any drugs link.

"There are no salient facts in our possession that are not in yours. Ron explicitly denied any sexual element."

The Caerphilly MP has gone away with his family to consider his position, Tony Blair's spokesman said.

Ron Davies after winning the election as Labour Welsh leader

"The prime minister thinks Ron is entitled to a day or two to take stock," he said.

The spokesman said all the "intelligent questions" were put to the former Welsh secretary, but Mr Blair took the view that the error of judgement in going off in a car with strangers was itself enough to justify resignation.

Union plea for balance

Mr Davies still has the support of the union which sponsors him. Unison leader Derek Gregory told the BBC: "He's done a brilliant job as Secretary of State and has made a thousand decisions which have been excellent judgements.

"We have to allow him a couple of days to reflect. If he stays, the party will unite behind him. If he resigns, the party will have to elect a new leader.

"What happened on Clapham Common would not affect Ron Davies's ability to carry out his job."

Hague: Questions need answers

Opponents say if Mr Davies's "error of judgement" was serious enough to force him out of the cabinet job, it should also preclude his holding the top job in Cardiff.

Nicholas Jones: Davies situation is first test of government skill in crisis management

The Conservative leader, William Hague, said: "It's not clear what has caused Mr Davies immediately to resign from the cabinet but not as the Labour leader for the elections to the Welsh Assembly. And I think we all need to know the answers."

Mr Davies is the first member of Tony Blair's cabinet to resign. If he pulls out of the assembly post, the government could face a fresh ballot.