BBC chairman Richard Sharp has resigned after a report found he broke rules by not revealing his part in former PM Boris Johnson securing an £800,000 loan.
A review of the arrangement decided Sharp twice broke the code covering public appointments.
Adam Heppinstall KC’s inquiry said the deal risked the perception Mr Sharp was not independent from Mr Johnson.
Later, Mr Sharp, a former Goldman Sachs banker, stood down from his prestigious and influential role with the broadcaster.
That decision saved the PM Rishi Sunak having to decide the fate of the wealthy Tory part donor.
Mr Sunak said: “When concerns are raised, it is right there is a proper process, an independent process that we don’t prejudge, we allow it to carry on, establish the facts of what happened, reach a conclusion.
“That has happened, Richard Sharp has resigned.
“But it is right that we do these things properly and professionally, I think most people will think that is the right thing to do.”
Mr Johnson has kept quiet on the resignation.
Mr Sharp said: “The breach of the rules was inadvertent and not material.
“Nevertheless, I have decided that it is right to prioritise the interests of the BBC.
“I feel that this matter may well be a distraction from the corporation’s good work were I to remain in post until the end of my term.
“I have therefore this morning resigned as BBC chair to the secretary of state, and to the board.”
Mr Sharp has said he will stay on until a replacement is found.
The BBC Board said:
“We accept and understand Richard’s decision to stand down.”
BBC director-general Tim Davie thanked Mr Sharp for his service and “the drive and intellect he brought to his time as chairman”.
Mr Sharp has been engulfed in a row over his appointment after it emerged, he’d help “facilitate” an £800,000 loan guarantee for Mr Johnson.
Weeks later Mr Sharp was appointed BBC chairman.
recuse himself from the process due to “contact” between himself and the BBC chairman.
Mr Heppinstall said Mr Sharp “failed to disclose potential perceived conflicts of interest to the panel which interviewed candidates and advised ministers.”