Daily Mirroreditor Mr Piers Morgan been sacked after the newspaper's publishers admitted that the pictures of British soldiers abusing Iraqi prisoners were a "calculated and malicious hoax".
Mr Morgan was fired hours after the regiment at the centre of the controversy demanded an apology. The British government declared they were a hoax yesterday, although an investigation by Special Branch is still underway.
A statement from Mirror publishers Trinity Mirror said: "The Daily Mirrorpublished in good faith photographs which it absolutely believed were genuine images of British soldiers abusing an Iraqi prisoner.
"However there is now sufficient evidence to suggest that these pictures are fakes and that the Daily Mirrorhas been the subject of a calculated and malicious hoax.
"The Daily Mirrortherefore apologises unreservedly for publishing the pictures and deeply regrets the reputational damage done to the QLR and the Army in Iraq.
"The paper will continue to cooperate fully with the investigation.
"The Board of Trinity Mirror has decided that it would be inappropriate for Piers Morgan to continue in his role as Editor of the Daily Mirrorand he will therefore be stepping down with immediate effect."
The statement came just hours after Mr Morgan rejected suggestions that he would quit. "All I want to say is we published the truth," he told ITV News. "We have revealed a can of worms. If the Government chooses to ignore that, it is entirely a matter for them."
Asked if he was going to resign, Mr Morgan replied: "No."
Senior officers from the Queen's Lancashire Regiment today attacked the Daily Mirrorfor the photos including one said to show a British soldier urinating on a hooded captive.
"That photograph was a mocked-up fake and it wasn't taken in Iraq. This is a deadly serious business because people's lives have been placed in jeopardy by what has turned out to be utter and complete nonsense," Brigadier Geoff Sheldon said.
The Mirrorphotos were published shortly after the appearance of damning photos and revelations of abuse of Iraqi detainees by US troops at the Abu Ghraib jail near Baghdad.