Tulip Siddiq finally quit her Treasury post last night.
It came 26 days after the Mail revealed she was facing a major corruption probe in Bangladesh.
The anti-corruption minister and close friend of Sir Keir Starmer resigned after he was effectively advised to sack her over her links to her aunt’s regime in Dhaka.
Sir Laurie Magnus, the Prime Minister’s ethics adviser, said it was ‘regrettable’ that she had not been more alert to the reputational risks of her family ties to the deposed former prime minister of Bangladesh.
He also described as regrettable her inability to produce conclusive evidence that the tax and funding arrangements for the houses she used that were connected to Sheikh Hasina were ‘in order’.
After Ms Siddiq was accused of lying to The Mail on Sunday about who had gifted her a flat, he said it was ‘unfortunate’ that she had been forced to correct the record.
He concluded that while she had not broken the ministerial code – and he had not ‘identified evidence of improprieties’ – Sir Keir should ‘consider her ongoing responsibilities’ as anti-corruption minister.
Despite Sir Laurie’s damning advice, the PM – a close personal friend and political ally of Ms Siddiq’s – told her that the ‘door remains open for you going forward’ in his reply.
Tulip Siddiq (pictured on Tuesday) resigned from the Government, saying she did not want to be a ‘distraction’
Ms Siddiq acknowledged that continuing as a Treasury minister would be a ‘distraction from the work of the Government’
Ms Siddiq and Sir Keir, whose constituencies neighbour each other, at the election count in 2015
Ms Siddiq (left) with her aunt, Sheikh Hasina, (centre) and Vladimir Putin (right) in 2013
He said he accepted his City minister’s resignation ‘with sadness’ and said that she had made a ‘difficult decision’.
It comes as the Prime Minister is also facing pressure over Chancellor Rachel Reeves.
She is on course to break her own newly-minted fiscal rules as soaring Government borrowing costs threaten to derail Labour’s spending plans.
Yesterday the Mail labelled Ms Reeves and Ms Siddiq as Labour’s ‘two lame ducks’.
Ms Reeves was faced with taunts over quitting herself yesterday when she was grilled by MPs, with Shadow Chancellor Mel Stride saying: ‘To go, or not to go, that is now a question.’
On Monday Sir Keir was forced into insisting that he backed Ms Reeves to remain Chancellor until the end of the Parliament – after earlier refusing to do so.
Ms Siddiq’s treatment differs markedly from that of former transport secretary Louise Haigh who quit almost immediately following questions about a fraud conviction.
The Prime Minister (pictured on Tuesday) is also facing pressure over Chancellor Rachel Reeves. She is on course to break her own newly-minted fiscal rules as soaring Government borrowing costs threaten to derail Labour’s spending plans.
On Monday Sir Keir was forced into insisting that he backed Ms Reeves to remain Chancellor until the end of the parliament – after earlier refusing to do so
The handling of the crisis over Ms Siddiq’s links to her aunt Sheikh Hasina’s regime has raised questions about the PM’s political judgment.
The day before her departure, No 10 voiced ‘full confidence’ in her in spite of several weeks of damaging headlines. Last night, opposition parties rounded on the Government for drawing out the process in the face of mounting calls for Ms Siddiq to resign.
Tory leader Kemi Badenoch accused the PM of ‘weak’ leadership and questioned whether he had delayed the process due to his friendship with the minister.
She said: ‘It was clear at the weekend that the anti-corruption minister’s position was completely untenable. Yet Keir Starmer dithered and delayed to protect his close friend.
‘Even now, as Bangladesh files a criminal case against Tulip Siddiq, he expresses “sadness” at her inevitable resignation.
‘Weak leadership from a weak Prime Minister.’
Liberal Democrat spokesman Sarah Olney said: ‘It’s right Tulip Siddiq resigned, you can’t have an anti-corruption minister mired in a corruption scandal.’
Keir Starmer accepted his City minister’s resignation ‘with sadness’ and said that she had made a ‘difficult decision’. (Pictured: The letter from the PM to Ms Siddiq)
The Institute for Government said the handling of the row showed Labour were not yet used to the scrutiny of Government.
It added: ‘Having been so quick to loudly criticise the last government for its perceived failings on ethics and integrity, Starmer and his team need to show that they truly understand the importance of meeting the standards that they promised to uphold once in office.’
Sheikh Hasina was deposed as Bangladesh’s prime minister in August amid allegations of corruption and brutality.
Ms Siddiq and members of her family are under investigation by an anti-corruption commission set up by the new government in Dhaka.
She was alleged to have been involved in brokering a 2013 deal with Russia for a nuclear power plant in Bangladesh in which billions are said to have been embezzled.
She has also been named in a second investigation into the illegal allocation of land to members of her family during her time as an MP.
Ms Siddiq referred herself to Sir Laurie last week following mounting questions about her use of properties connected to her aunt. In her resignation letter, she cited the row over her connections as a ‘distraction’ to the Government.
Last night she was replaced by pensions minister Emma Reynolds, who will take over her City brief.
Questions were immediately raised about the appointment after it emerged that she allegedly lobbied the last government to water down restrictions on Chinese business activity. Ms Reynolds will be replaced by former Resolution Foundation chief and now Labour MP Torsten Bell.
