Mr Whelan said it was "absurd" so much attention had focused on rumours about his involvement in the recent home-a-loan scandal.

But, in a statement explaining his actions, he said he could not longer carry on at his present job.

"I want to make it absolutely clear that I was not responsible for disclosing any information about Peter Mandelson's mortgage and I refute any suggestion that I was.

"I do however take the view that the job of press secretary becomes extremely difficult if the press secretary, and not the department he serves, becomes the story and the subject of excessive attention.

BBC Political Correspondent John Pienaar: "He's going on his own accord"

"It is absurd that, on the day the euro starts trading, in the week the Monetary Policy Committee is meeting and when the chancellor is working on a number of important initiatives for the New Year that there is such attention focused on me.

"Therefore, as soon as an appropriate opportunity becomes available, I will move but in the meantime I will continue to do my job at the Treasury to the best of my ability, promoting the New Labour policies on which Tony Blair and Gordon Brown have worked so closely for so long."

Speculation has surrounded Mr Whelan's future at the Treasury following the row over the downfall of former trade secretary Peter Mandelson.

Home loan: Peter Mandelson's controversial house

Mr Whelan returned to work on Monday after spending 10 days out of contact after allegations he leaked information that led to the resignation of Mr Mandelson.

Mr Mandelson quit after it was revealed he had received a secret loan of £373,000 from then paymaster general Geoffrey Robinson to help buy his London home. Mr Robinson also resigned.

Like Mr Mandelson and Mr Robinson before him, Mr Whelan left his job still insisting he had done nothing wrong.

He was backed in this view by Prime Minister Tony Blair's press secretary who said there was "no evidence" Mr Whelan had leaked against the former trade secretary.

The Downing Street spokesman added that he did not believe Mr Whelan was the source.

The Guardian newspaper, which broke the story, itself took the unusual step of stating its information did not come from the chancellor's office.

But some Cabinet ministers had been reported to have been demanding Mr Whelan's resignation.

Downing Street had moved to distance the prime minister from the row, saying: "It is a matter entirely for the chancellor as to who he employs".

Gordon Brown is now seeking a new spokesman

Mr Whelan's departure from the Treasury comes as The Mirror newspaper revealed details of a memo to Mr Brown from Mr Mandelson asking him not to stand for the Labour leadership in the wake of John Smith's death in 1994.

The Mirror denies that the memo was leaked to journalist Paul Routledge by his close friend Charlie Whelan.

Leader of the House Margaret Beckett rounded on those attacking Mr Whelan.

"When people get cross about some of the things that happen they look for people to blame and the flak flies.

"But the government works well together as a whole and that includes the Treasury team."

Despite government moves to kill the story, Conservatives say that continuing row has exposed civil war at the heart of New Labour.

Shadow Trade Secretary John Redwood said: "Now the Brownites will be looking at a way of fighting back.

"If the man who didn't leak the home-loan story has to resign, will the prime minister now organise a proper leak inquiry to find out who did do it and sack him or her?"