A second British cabinet minister announced she was resigning today, undermining prime minister Gordon Brown's authority and raising doubts about his political future.
Communities minister Hazel Blears' decision to quit, on the eve of European and local elections in which Mr Brown's Labour Party faces a rout, followed a similiar move by Britain's first female interior minister and pre-empted a widely expected cabinet reshuffle.
Ms Blears and Jacqui Smith are the highest profile casualties of disclosures about outlandish, taxpayer-funded expenses claims made by members of parliament at a time when recession is forcing hundreds of thousands out of work.
Both had been tipped for the axe in any reshuffle.
"Today I have told the prime minister that I am resigning from the government," Ms Blears, who is responsible for local government affairs, said in a statement.
Hard-hit by the expenses scandal, Labour trails the opposition Conservatives by up to 20 points with a parliamentary election due by mid-2010. Brown has pinned any hope of bouncing back on a swift improvement in Britain's shrinking economy.
Speaking at a rowdy session in parliament, Mr Brown rejected calls from the two main opposition leaders to call an early election that could end Labour's 12-year grip on power.
Mr Brown said he was focusing on cleaning up the expenses scandal and trying to pull Britain out of its deepest recession since the second World War.
His reshuffle, which could come as early as Friday, had been seen as an opportunity to revive his fortunes. But analysts said the resignations of Ms Blears and Ms Smith would dampen its impact.
"They are uninterested in Gordon Brown and the appearance of Gordon Brown's government, they are doing this for their own sake," said Tony Travers, politics professor at London School of Economics.
The reshuffle is a dangerous time for Mr Brown because it could bring discontent with his leadership into the open.
The Guardiannewspaper, traditionally supportive of Labour, called for Mr Brown to go and its website reported that some rebel Labour MPs were seeking signatures for a letter urging him to step down. Brown replaced Tony Blair mid-term in 2007 after serving as finance minister for a decade.
Any change of leader would be certain to add to the clamour for a general election to replace a discredited parliament. A growing number of MPs have said they will not stand for re-election after getting caught up in the expenses scandal.
If Brown weathers the storm, he is likely to wait until next May before calling an election.
There are signs that Mr Brown's efforts to revive the economy, which shrank at its sharpest rate since 1979 in the first three months of this year, are working.
A highly regarded economic survey showed Britain's dominant services sector returned to growth last month.
Business minister Peter Mandelson said the uproar over expenses, which has damaged all of the main political parties, could hurt Britain's economic prospects.
"If people believe our political institutions are being diminished or that our democratic system is being weakened they will start to draw economic and commercial conclusions from that if we are not careful," he said.
Labour has faced the brunt of voter anger against many MPs who have milked the allowances system, claiming from taxpayers the cost of everything from duck houses to cleaning a moat.
Ms Blears has agreed to pay more than £13,000 in tax on the sale of a property. Last month, she said Labour had shown a "lamentable failure" to get its message across.
Ms Smith charged taxpayers for her husband's rental of two pornographic movies and declared a rented room in her sister's London home as her main residence, claiming nearly 23,000 pounds last year for her constituency home.
Reuters