Coulson's departure takes heat off Cameron – but not Murdoch

The News of the World phone-hacking scandal forced Andy Coulson to resign for a second time yesterday, the former editor quitting his Downing Street post as David Cameron's director of communications.

Mr Coulson asked to see the Prime Minister on Wednesday evening in his Downing Street office and told him that he could no longer carry out his job effectively because of the continuing pressure of allegations against him. Mr Cameron accepted his resignation.

His departure opens the way for News International to admit that phone hacking at its Sunday red-top newspaper was more widespread than it has previously acknowledged. The company is conducting an internal investigation after suspending its assistant editor Ian Edmondson before Christmas. It also faces a string of legal actions from celebrities and politicians who claim their phones were targeted by the paper.

There are concerns at the top of the company that a spotlight could fall on its chief executive Rebekah Brooks, who is said to have personally lobbied Mr Cameron to not cut adrift Mr Coulson from No 10. She is Mr Coulson's close friend and predecessor as editor at the News of the World, before she moved to become editor of The Sun in 2003. Senior executives pray that Mr Coulson's resignation will take some of the sting out of the story.

But friends who have spoken to Mr Edmondson say he feels "hung out to dry" by News International. Any information he has about what went on at the News of the World under Mr Coulson could be hugely embarrassing.

"It is going to be increasingly difficult for Andy Coulson to convince anybody that he didn't know what was going on," the friend said.

The group chairman Rupert Murdoch is in London this week and passed up a chance to go with his wife to a state dinner in Washington, hosted by President Barack Obama for the Chinese President Hu Jintao. White House gossips wondered why he was not there.

News International declined to say what Mr Murdoch has been doing in London, but it is thought to relate to News Corporation's troubled attempts to take full control of BSkyB, which could be subject to a competition inquiry.

Charlotte Harris, the lawyer representing football agent Sky Andrew, whose voicemail was allegedly hacked, said that the resignation of Mr Coulson would be followed by new civil claims against the News of the World and an increasing rate of disclosures in the courts about the true extent of phone hacking at the Sunday paper.

She told The Independent: "As the cases progress over the next few weeks we will find out more, probably through documents in evidence and witness testimony, as to what actually happened, who was involved, and for how long. The news today seems to have made people feel braver about taking action in court."

A Downing Street source said: "Andy just increasingly felt that he could not do his job with this going on at the same time. He was spending hours of his day trying to respond to stories about him.

"He had to take a week off before Christmas to prepare and give evidence in the Tommy Sheridan trial. One day he left his house at 4.30 in the morning to avoid the photographers outside. It became too much."

Mr Coulson's departure is a political headache for Mr Cameron. He relied on him for his knowledge and connections in the tabloids as well his "Essex Boy" background, in contrast to the more privileged upbringings of others in Downing Street. The pair always met first thing in the morning to map out strategy and anticipate potential problems.

Although Mr Coulson rarely spoke to journalists he was responsible for framing all key government announcements. He was credited with building relationships with the Liberal Democrats. He insisted on one integrated media operation in Downing Street and appointed a Liberal Democrat, Jonny Oates, as his deputy.

One person in Downing Street who is unlikely to be upset by his departure is Mr Cameron's other close aide and adviser, Steve Hilton. By the time he left the pair were barely on speaking terms – Mr Hilton disliked Mr Coulson's "knee-jerk tabloid instincts", while Mr Coulson felt Mr Hilton did not grasp political realities.

Mr Coulson will not leave Downing Street for another few weeks to give time for Mr Cameron to find a successor.

In a statement issued yesterday, Mr Coulson said he stood by his previous denials of knowing anything about phone hacking. Mr Cameron praised Mr Coulson's "complete professionalism" and said he had been a "brilliant member" of his team.

Critics said the announcement was deliberately delayed by two days to "bury the bad news" and ensure it coincided with Tony Blair's appearance in front of the Iraq Inquiry. Downing Street branded the idea as "complete rubbish".

Mr Coulson resigned as editor of the News of the World in 2007 after the paper's former royal editor Clive Goodman and private investigator Glenn Mulcaire were jailed for phone hacking.

Although he accepted ultimate responsibility for the illegal activities, he has always denied knowing of them. A Scotland Yard investigation resulted in no further charges, but the Crown Prosecution Service has since asked a senior QC to "comprehensively" re-examine material amassed as part of the original inquiry and any new evidence.

Labour MP Tom Watson said the resignation raised "serious questions" about the Prime Minister's judgement, a phrase repeated by Labour leader Ed Miliband. "This is the second job Andy Coulson has resigned from for something he claims to know nothing about," Mr Watson said. "His departure points to the need for a deeper investigation into the affairs of Rupert Murdoch's News Corp."

'When the spokesman needs a spokesman, it's time to move on...'

This is the full statement issued by Andy Coulson, Downing Street's director of communications:

"I can today confirm that I've resigned as Downing Street director of communications. It's been a privilege and an honour to work for David Cameron for three-and-a-half years.

"I'm extremely proud of the part I've played in helping him reach No 10 and during the Coalition's first nine months.

"Unfortunately, continued coverage of events connected to my old job at the News of the World has made it difficult for me to give the 110 per cent needed in this role. I stand by what I've said about those events but when the spokesman needs a spokesman, it's time to move on.

"I'll leave within the next few weeks and will do so wishing the Prime Minister, his family, and his brilliant and dedicated team the very best for what I'm sure will be a long and successful future in government."

David Cameron said in a statement: "I am very sorry that Andy Coulson has decided to resign, although I understand that the continuing pressures on him and his family mean that he feels compelled to do so...

"Andy has carried out his role with complete professionalism. He has been a brilliant member of my team and has thrown himself at the job with skill and dedication. He can be extremely proud of the role he has played, including for the last eight months in government."