The leader of Liverpool City Council has resigned after an investigation into claims of a conspiracy against chief executive Sir David Henshaw.
Mike Storey (l) was accused of plotting against Sir David Henshaw
Liberal Democrat Councillor Mike Storey quit after the inquiry found he broke the code of conduct for councillors.
E-mails exchanged between himself and chief press officer Matt Finnegan about the future of Sir David had been uncovered by an internal inquiry.
Mr Storey admitted to what he called an "error of judgment".
Mr Finnegan is currently suspended from his post.
The inquiry by the Standards Board for England was launched after a trawl of computer records found e-mails between Mr Storey and Mr Finnegan in May.
Phil Halsall, the council's executive director for resources, said at the time there had been a "clear conspiracy" between the pair to force out Mr Henshaw.
He said Mr Storey had promised to protect Mr Finnegan from an internal audit review and said both men's behaviour "fell far short of the standards expected by the council or by national codes".
Sir David had claimed the report provided "prima facie evidence of a conspiracy".
Mr Storey, who became leader in 1998, said he had been guilty of an "error of judgment".
He said: "I referred myself to the Standards Board for investigation and they have found I have broken the Code of Conduct that all councillors have to adhere to.
"I have apologised to the Standards Board for this lapse in the high standards I have always set myself and strived to maintain throughout my public life.
"However, the people of Liverpool have a right to expect their elected representatives to uphold the highest levels of propriety and ethics at all times, and therefore I must now resign as council leader for this error of judgment."
Sir David said in a statement: "I am very disappointed to see Mike Storey go but we have to get on with the job in hand.
"We have done some fantastic work in the last few years."
Lib Dem party leader Charles Kennedy said Mr Storey had "done the honourable thing" by resigning.
He said Liverpool had been "transformed" during his leadership and praised his role in bringing the European Capital of Culture 2008 and World Heritage City status to the city.
He added: "He can rightly be proud of what he has achieved, bringing more jobs and prosperity, while giving the children of Liverpool a much better start in life through huge improvements in the education service."
The business lobby group Downtown Liverpool in Business said his resignation was a "sad end for a good leader".
Chairman Frank McKenna said he believed council officers had too much power in the city and elected councillors needed to take more responsibility.
Mr Storey is a primary school head teacher in Knowsley and is the longest serving councillor in the city, having been elected in 1973 at the age of 23.
He was awarded the OBE in 1992 and the CBE in 2002 for services to the regeneration of Merseyside.
His resignation leaves the ruling Liberal Democrats looking for a new council leader, but their majority will not be affected as he will remain as councillor for Wavertree.