David Cairns explains his decision to resign from government
Scotland Office minister David Cairns has resigned from the government, saying the time has come to "allow a leadership debate to run its course".
The Inverclyde MP is the first minister to resign since rebel MPs began calling for a leadership contest.
He told the BBC he was not part of a plot but felt it was time to "clear the air" and have a leadership debate.
Gordon Brown said he was "disappointed" by the MP's decision but warned this was not a time for "internal debate".
In a letter to Mr Cairns, the prime minister said: "As you know, the world is facing a time of economic upheaval. I believe it is vital that we as a government, and as a country, stand together in the face of these difficult times and concentrate all our efforts on helping the British people to come through them.
"I am therefore disappointed by your decision to leave the government, and I do not agree with you that this is the time at which the Labour Party should be focused on internal debates."
The prime minister has appointed the Glasgow North MP Ann McKechin to replace Mr Cairns as Scotland minister.
Earlier Labour's ruling NEC body rejected calls for nomination papers to be sent out to all Labour MPs.
Two MPs have already lost government jobs and a third resigned after saying Gordon Brown should face a challenge.
'Article of faith'
Mr Cairns, a former Catholic priest who was elected to Parliament in 2001, became a minister at the Scotland Office in 2007.
In his letter, Mr Cairns said he had never uttered "a public word of criticism of our Labour government" adding: "For me it is an article of faith that the worst day of a Labour government is better than the best day of a Tory or SNP one."
He said it was to his "dismay" that the "current crisis" had begun and he had tried to advise the rebels against requesting nomination forms.
I'm not part of a plot. I'm not part of a strategy
He said he was unhappy that their names had been leaked - and he was unhappy with the government's response that those involved were "a tiny number of disaffected people who have taken leave of their senses".
"The issue of leadership and direction are being discussed and argued over, and to go on denying it is hardly credible," he wrote.
"To that end I believe that the time has come to take the bull by the horns and allow a leadership debate to run its course.
"I know that it is incompatible to hold this view and to remain a serving minister, and although it had not been my intention to resign, I have reluctantly concluded that it is the only honourable course of action left open."
Later he told the BBC he wanted to play a part in the leadership debate and to do so and remain in government would have been "hypocrisy of the highest order".
He added: "I have no idea, absolutely hand on heart, if anyone else is planning to resign, PPSs, cabinet ministers or otherwise. I'm not part of a plot. I'm not part of a strategy."
A Downing Street spokesman told the BBC: "The prime minister has accepted David Cairn's resignation. The exercise of government demands collective responsibility."
Gordon Brown is the man with the experience and the intellect, and the strategy to lead us through these current difficulties in the United Kingdom
Mr Cairns used to be a researcher for Siobhain McDonagh, the first member of the government to be sacked in the row.
The former assistant whip broke ranks last Friday to call for a challenge to the prime minister.
A party vice-chairman, Joan Ryan, was then sacked for the same reason and Barry Gardiner, who had been the PM's special envoy on forestry, left the job "by mutual consent" after backing the calls.
Mr Cairns played a prominent role in the Glasgow East by-election which Labour lost to the SNP and was close to Scottish Secretary Des Browne, who, the BBC understands, had tried to talk him out of resigning.
The BBC understands that a handful of ministerial aides are also concerned about Gordon Brown's leadership and are discussing what to do in the wake of the resignation.
Commenting on Mr Cairns' resignation, SNP MP Angus Robertson said: "This is a hugely significant and damaging development for the prime minister. Not only has Gordon Brown lost control of Scotland, he has now even lost control of the Scotland Office."
Labour MP Stephen Pound said Mr Cairns had been "extremely close" to Ms McDonagh so his resignation had been "suspected for a while". He told the BBC Mr Brown would be "frustrated" at another distraction from his job as PM, of guiding Britain through difficult times.
Cabinet ministers such as Alan Johnson and Harriet Harman rallied round Mr Brown on Tuesday and urged unity in the party, saying voters expected them to focus on important issues like turbulence in the financial markets.
Justice Secretary Jack Straw told BBC Radio 4's World at One: "I'm absolutely clear Gordon Brown is the man with the experience and the intellect, and the strategy to lead us through these current difficulties in the United Kingdom."
And Labour's ruling National Executive Committee backed the party's general secretary's refusal to send out leadership nomination papers to all Labour MPs ahead of next week's conference.
But John Cruddas, who last year narrowly missed out on Labour's deputy leadership, said in an article for The House magazine that the party's previously radical programme had "stalled" under Mr Brown.
And former home secretary Charles Clarke repeated his call for Mr Brown to improve his performance or quit with honour, saying Labour had to "recover the will to win" and reject "fatalist defeatism".
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