"I have always been honest about my recollection of events," Home Secretary David Blunkett said in his resignation statement on Wednesday.
"But any perception of this application being speeded up requires me to take responsibility. That is why with enormous regret I have tendered my resignation to the prime minister today."
One of Blair's most trusted and powerful cabinet lieutenants, Blunkett held responsibility for immigration, policing and anti-terrorism among other areas.
The minister had come under growing pressure because of questions of whether he used his office to help his former lover.
Blunkett further undermined his position by making caustic comments about colleagues to the author of a newly published biography.
Blair has been embarrassed by
Blunkett's personal problems
At present he is the subject of an official inquiry into whether he used his office to speed up a residence visa for a nanny employed by his former lover, magazine publisher Kimberley Quinn, an American.
Blunkett's problems have been a continuing distraction and embarrassment for the government of Prime Minister Tony Blair since the affair was revealed in August, but it got worse in December with the disclosure of his low opinion of some of his colleagues.
Blunkett's targets included Foreign Secretary Jack Straw, Treasury chief Gordon Brown and Education Secretary Charles Clark. As for Blair, he doesn't like people who stand up to him, he told biographer Stephen Pollard.
Feeling the pressure
Blunkett, Britain's only blind legislator and the country's top law-and-order official, showed signs of feeling the pressure - using a back door to leave his home earlier on Wednesday to avoid reporters waiting at the front - and cancelled plans to appear in the House of Commons to introduce initiatives to combat crime with knives.
"I think one is dealing here with somebody who it appears, certainly to many people in the Commons and the country, is quite seriously unbalanced"
Two betting agencies reported a rush of wagering that Blunkett would resign in December.
One Labour lawmaker, Bob Marshall-Andrews, added to the pressure by saying he thought Blunkett was unfit for his office.
"I think one is dealing here with somebody who it appears, certainly to many people in the Commons and the country, is quite seriously unbalanced," Marshall-Andrews said.
Blunkett has come under fire neither because of his love affair with Quinn, the married publisher of The Spectator magazine, nor over his legal action to establish paternity of her two-year-old son.
However, allegations that he abused his office to quickly secure a resident visa for Quinn's Filipino nanny, Leoncia Casalme, was political dynamite.
Blunkett has denied it, and an official investigation is under way.