London: The British prime minister`s media chief quit on Friday over phone hacking allegations when he was a newspaper editor, a move that will embarrass the Prime Minister and could complicate News Corp`s bid to buy BSkyB.
Before taking on his political role in 2007, Coulson had resigned as editor of Sunday tabloid newspaper News of the World after one of his reporters was jailed for secretly listening to phone messages of royal household staff.
The newspaper is owned by Rupert Murdoch`s News Corp, which is waiting to hear if the government will clear its planned $12 billion buyout of pay TV operator BSkyB or refer the deal to competition authorities for further checks.
Coulson, who has always denied any knowledge of wrongdoing at the newspaper, said he could not focus on his role at Downing Street given the renewed speculation about what went on when he ran the newspaper.
"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 percent needed in this role," Coulson said in a statement.
"I stand by what I`ve said about those events but when the spokesman needs a spokesman it`s time to move on."
Prime Minister David Cameron had repeatedly defended Coulson, part of his inner circle, despite critics questioning his judgment in giving him a second chance following his resignation from the News of the World.
"During his time working for me, Andy has carried out his role with complete professionalism," Cameron said in statement, adding that he was "very sorry" to see Coulson go.
Coulson was seen as having the common touch needed to help finesse the message of a government including many wealth people from privileged backgrounds at a time of harsh state spending cuts.
Analysts said Coulson`s resignation was inevitable.
"I think his position had become increasingly untenable. Even if he is completely innocent, it is becoming a major distraction from what David Cameron is trying to achieve in terms of PR (public relations) and image," said Ivor Gaber, professor of political journalism at London`s City University.
Police said last month that there was not enough evidence to charge Coulson with any crime.
However, the story resurfaced this month when the News of the World suspended senior editor Ian Edmondson, named in a lawsuit by film star Sienna Miller, who accuses the paper of breaking into her voicemail account to hear her messages.
Coulson`s exit severs a link between the government and News Corp, amid mounting criticism that Culture Secretary Jeremy Hunt is too close to Murdoch to judge whether the company should be allowed to buy BSkyB.
Hunt is in charge of deciding whether to refer the proposed deal to Britain`s Competition Commission, which could delay any deal by six months and push up the likely price.
News Corp`s British newspapers supported Cameron during last year`s national parliamentary elections.
"I think the resignation will take the heat off Cameron personally," said Steven Barnett, Professor of Communications at Westminster University.
"But it also raises the profile of the hacking case, at a time when the government and possibly the Competition Commission are examining suitability issues and the power of a large and enhanced media organization," he added.