The top US emergencies official has resigned following criticism over the response to Hurricane Katrina.
George Bush had originally praised Michael Brown's efforts
Michael Brown, director of the Federal Emergency Management Agency (Fema), had already been dumped as head of the rescue effort by President George Bush.
News of his resignation came after the president visited central New Orleans for the first time since the disaster.
In the city, the bodies of 45 mostly elderly patients have been found in a flooded hospital.
The overall confirmed death toll in the southern states affected by Hurricane Katrina has passed 500. Officials have said the final number of dead could be much lower than the thousands feared initially.
Opinion polls show deep dissatisfaction with Mr Bush's handling of the crisis.
Mr Brown said he was quitting "in the best interest of the agency and best interest of the president".
"The president appreciates Mike Brown's service," White House spokesman Scott McClellan told reporters on board Air Force One.
"This was Mike Brown's decision. This was a decision he made."
Mr Brown had been recalled to Washington at the weekend from Louisiana, replaced at the helm of the recovery operation by US Coast Guard Vice Admiral Thad Allen.
Only days earlier Mr Bush had said he was doing "a heck of a job".
But US media and opposition politicians launched a volley of criticism at Mr Brown, saying he lacked disaster expertise, and at Mr Bush for appointing him in 2001.
Time magazine said Mr Brown lacked emergency relief experience before he joined the agency.
The Washington Post said that five of eight top Fema officials were appointed despite having done hardly any work on disasters before - but that all had helped Mr Bush's 2000 election campaign.
Power is down but conditions are said to be improving in New Orleans
House Democratic Leader Nancy Pelosi said the resignation was long overdue.
"His resignation is the right thing for the country and for the people of the Gulf Coast states," she said.
David Paulison has been named as the acting head of Fema. He is a former chief of the Miami fire department, with experience of emergency relief following Hurricane Andrew in 1992.
Earlier on Monday, the president toured central New Orleans to see the wrecked city first hand.
With Admiral Allen, New Orleans Mayor Ray Nagin, and Louisiana Governor Kathleen Blanco, he stood on the back of a military truck and was driven through flooded streets, ducking under half-collapsed power cables.
He later visited Gulfport, Mississippi, and thanked Mexican troops who were helping to rebuild a school.
Security has been restored in thinly-populated New Orleans
His third and longest visit to the scene came as polls in Time and Newsweek magazines suggested popular dissatisfaction with the government response.
The Newsweek poll gave Mr Bush his lowest approval rating as president - just 38%.
However, with recovery work in full swing and making headway, the president's aides hope criticism of his administration's slow response will start to subside, the BBC's Daniel Lak reports from New Orleans.
In comments during his visit, Mr Bush admitted that authorities may have relaxed before the worst effects of Hurricane Katrina, thinking they had "dodged the bullet".
He said Congress should examine whether the response to the disaster failed in any way.
"My attitude is that we need to learn everything that we possibly can," he said. "There'll be time to take a step back and to take a sober look at what went right and what didn't go right."
He again rejected suggestions that the response was slow because so many of the victims were poor and black. "The storm didn't discriminate and neither will the recovery effort," he said.
"When those coast guard choppers... were pulling people off roofs, they didn't check the colour of a person's skin. They wanted to save lives."
Mr Bush added Arizona and Virginia to a list of states where a state of emergency has been declared, allowing them to receive federal money towards the cost of housing evacuees.