Former immigration minister Beverley Hughes, who resigned earlier on Thursday, has insisted she did not "intentionally mislead anyone".
Hughes has faced ongoing pressure
She told MPs she decided to go after she came across a letter from last year warning her of immigration abuses in Romania and Bulgaria.
This contradicted her assurances in a BBC interview on Monday that she had not been aware of such allegations.
She told MPs she may have "unwittingly" given a "misleading impression".
The letter had been sent to Ms Hughes by her former Home Office colleague Bob Ainsworth in March last year.
In a letter of reply, Ms Hughes wrote - "we are aware of concerns ....about possible abuse."
In a five-minute Commons resignation statement, cheered by supportive Labour MPs, Ms Hughes said she had done her best to answer questions on the affair "honestly and directly".
"I am confident that at all times I have acted properly and in the best interests of this country," she said.
But since the letter had come to light, she could not "in conscience continue to serve as immigration minister".
She said there was "special obligation" on the holder of that post to be seen to uphold the highest standards, because immigration issues were "so open to misunderstanding".
She said she had been reviewing correspondence in preparation for the next phase of an internal inquiry into the alleged visa scam, when she came across Bob Ainsworth's letter.
She said she "became aware" that "however unwittingly, I may have given a misleading impression in my interviews on Monday night".
She thanked Home Secretary David Blunkett, a close friend and mentor who has stood by her throughout the row, for his support.
The Tories had accused the Home Office of approving some visa claims from eastern Europe despite warnings they were backed by forged documents.
Ms Hughes had dismissed calls to quit, saying she had not known of the claims.
The prime minister has replaced Ms Hughes with Work and Pensions Minister Des Browne.