Tony Blair's top aide and pugnacious media handler Alastair Campbell announced his resignation yesterday as the British prime minister battles the worst credibility crisis of his six-year rule.

Mr Campbell had been expected to quit later this year but the timing of his announcement - while both he and Mr Blair are enmeshed in a high-stakes inquiry into whether Britain hyped the case for war in Iraq - caught political observers unawares.

Few had expected the 46-year-old media manipulator to quit while he and his boss face their toughest test yet, with big questions still hanging over their role in nudging the nation to join Washington in a war few Britons backed.

His departure robs Mr Blair of his closest confidant and the man credited with masterminding the slick media strategy that helped Labour regain power after 18 years in the wilderness.

"This idea that the prime minister couldn't cope without me, or without anyone else, is an absolute nonsense. The prime minister is somebody of immense ability," said Campbell.

Yet his departure is a bitter blow to Mr Blair as the prime minister struggles with plunging popularity ratings amid perceptions style trumps substance within Mr Blair's inner sanctum.

Just on Thursday, Mr Blair became only the second British head of government to testify before a judicial inquiry, answering allegations of hyped Iraq intelligence and poor handling of the war's aftermath that left a top scientist dead. The first to testify was Mr Blair's predecessor John Major.

Mr Campbell, who helped orchestrate Mr Blair's two landslide election victories, said he wanted to hand over "in the next few weeks".

Mr Blair's office named his successor as David Hill, a public relations expert and former Labour Party press officer who will be welcomed as a straight talker after the "king of spin".

Mr Campbell played a key role in drafting a government dossier on Iraq's weaponry which has been subject to scrutiny in the inquiry into last month's suicide of weapons expert David Kelly.

"I had intended to leave last summer, but as the Iraq issue developed, the prime minister asked me to stay on," said Campbell, a former journalist and soft porn writer whose partner, Fiona, works for Blair's wife, Cherie, and is also leaving office.

Blair described Campbell as "an immensely able, fearless, loyal servant of the cause he believes in".

"In the extraordinarily difficult and wearing world of the modern media, he operated with tremendous skill and dedication," Blair said in a statement.

Bernard Ingham, who held Campbell's high-pressured job under Conservative Prime Minister Margaret Thatcher, said it was high time the abrasive media manipulator bowed out.

"He presided over an appalling period in government communication," Ingham told Reuters. "Campbell was obsessed with presentation - but the real culprit is Mr Blair."

Former Labour minister Gerald Kaufman said there was no smear from the so-called Hutton inquiry on Campbell, even though he was central to media allegations of "sexing up" intelligence.

Yet some within Labour will not mourn his departure, even if most were careful to craft the kindest of political obituaries.

"Alastair made a tremendous contribution, we wish him well," said John Prescott, Blair's No. 2 by title even as Campbell was routinely dubbed the "real" deputy prime minister.

"It's a big void to fill - but the Labour Party goes on."

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