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Video: Peter Hain's resignation statement
An emotional Peter Hain declared today that he "severely and seriously" regretted failing to declare £103,000 in donations to his campaign for the deputy leadership of the Labour Party, as he announced his resignation from the Cabinet to clear his name.
Giving a statement outside his old department, the former Work and Pensions Secretary told reporters that he felt he had been left with "no alternative" but to quit after police launched an investigation into whether he broke electoral law.
Mr Hain, who was also Secretary of State for Wales, continued to claim that the failure to declare the money, which was revealed earlier this month, was an administrative oversight which he regretted, and said he was resigning to "clear my name" against sleaze allegations.
In a dramatic day at Westminster, it is understood that Mr Hain phoned the Prime Minister at around 11.30am and informed him he had been told by the Electoral Commission of the impending police investigation. At that point, it is understood that he offered his resignation without hesitation, a decision which was accepted by Gordon Brown.
Immediately after the Commission officially announced its referral at 12.20pm, Mr Hain released a one-line statement saying that he would resign.
At 2pm, the MP – who made his name in politics as an anti-apartheid campaigner and is still considered the most left-wing member of Mr Brown's Cabinet – took to the steps of the Department for Work and Pensions to formally announce his decision.
Within two hours, he had been replaced as Work and Pensions Secretary by 37-year-old James Purnell, formerly the Culture Secretary, who only became an MP in 2001 and is considered one of Labour's rising political stars.
Mr Purnell’s appointment made way for a Cabinet reshuffle this afternoon that saw another three young Labour MPs given promotions.
Andy Burnham became the new Culture Secretary and was replaced as Chief Secretary to the Treasury by Yvette Cooper. Ms Cooper will now assume a full Cabinet role for the first time with Caroline Flint taking over from her as Housing Minister.
Wearing a black suit with purple and pink striped tie, Mr Hain told the press gathered outside the Department for Work and Pensions: "In view of the decision of the Electoral Commission today I have come to the conclusion that I have no alternative but to resign as Secretary of State for Work and Pensions and Secretary of State for Wales, and I have now done so."

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Harriet Harman, you're next!
Tom, St. Albans, England
Good riddance.
A Labour supporter
chris, croydon,
What took him so long? Good riddance and may the others follow soon!
Brown should have had the guts to sack him.
marsha, london,
About time!
David, St Albans, UK
At least he has done the honourable thing. Unlike the Ministers in Italy, that hold on to power even avter they are found guilty.
loris, Milan, Italy
So he's resigned to "clear his name". If he cared about his position/Country why didn't he stay in post and clear his name?
Mark P, Manchester,
And would people submitting tax returns or on benefits get away with not declaring their income if they claimed it was an oversight due to an administrative error, Mr ex secretary of the DWP?
I think not, they'd find them selves in court faster than any politician could get his nose out of the trough!
It seems the usual rules apply ...one law for them and another for us.
J. Lloyd, Leicester,
Did he actually resign, or did he send a coded note to a friend who then left a message on someones answer phone?
Just seems he does things via a circuitous route
Ken Wyatt, Todmorden, UK
This man was chosen to be a senior minister by Brown. He chose to spend more than any other candidate on his deputy leader campaign, but came fifth. He then tries to blame his campaign team for the irregularities, but he chose the team.
Not very good at judgment was he!
K Wells, Bognor Regis, England
gradually the scoundrels will be forced out
stephen bull, fontes, france
I always enjoy the way politicians have to "clear their name". That is an oxymoron if I ever heard one. After an appropriate period of quiet anonymity they then surface again in another portfolio and happily carry on with whatever it was they do......more of the same. As Solomon says in the Bible: there is nothing new under the sun. Like the cat, Hain will be back again.
GK, Calgary, Canada
This seems to me to be a storm in a teacup. Hain after all made a huge contribution to the Northern Ireland peace settlement, which issue has bedevilled UK politics for almost a century. The police in your country must have little to do. I wish him well.
Barry Pickup, DUBLIN, Ireland
Profile of a rebel? This gives rebels a bad name!
Jeremy Peck, Tarrant Keyenston, Dorset
He'll have to go back to basics and found a new political party...Woopsie! ...er... he's already done that once, hasn't he?
Edmund Burke, Kingston upon Thames, England
Well, well, I hope that the Customs & Revenue fully accept that I have made an 'innocent mistake' and an 'administrative error' if it is found that my personal tax and VAT returns are not in order. Somehow I don't think that will hold much sway with them.
Maybe if I said I was a member of the Labour Government, I might just get away with it.
pw, Sutton, Surrey
What a delicious story !. Good heavens and this was the paragon of virtue that used to lambaste us poor old South Africans. Well ,well well,what goes around comes around.
Robert Steenkamp, Johannesburg, South Africa
I'm impressed.
A labour politician resigning, perhaps he started a precedent...
G Howard, Saffron Walden,
Before getting too excited, remember that this sort of thing is a natural step towards the EU Commission trough.
Or maybe it was all a bluff, and his mysterious 'think tank' was in reality fund-raising for the big one - a shot at the EU Presidency!
After all, who would want to be deputy leader of a party well on its way back to oblivion?
Worrying, isn't it?
MikeM, St. Albans, England
Let's start bets on who will be the first labour politician to say "Let's put this behind us and move on..."
John Tomlinson, Brentwood, UK
You mean he was given £103,000 and he still came FIFTH???
The police did nothing last time, why should anything be different this time?
CA, Macclesfield, UK
Will he be using the 'sword of truth and trusty shield of fair play' in order to clear his name?
Gerald Dyson, Leeds,
Several things are amazing. Why spend so much money for a party post? What returns were they expecting and how, except by misusing their position? As this was an internal party election, without requiring any agreement with the Conservatives or Lib Dems, the Labour Party could have put a low cap on expenses and adhered to it - why did they not do it.?How can anyone say such a huge non compliance is adminstrative oversight? Lastly why do politicians linger on when the writing on the wall is clear? Hain should not have spent this kind of money; or having spent it, disclosed it; or, having been found out, resigned immediately.
Natarajan, London, UK
Peter Hain has set a fine example. as I stare at my tax bill and comteplate what I (don't) get for it, I hope his example is followed - by the entire government.
Michael Broers, Charlbury,
By some miracle this lot have got away with 10 years of incompetence. Suppose this result will be the same. We all know what happens to an ordinary citizen that fails to declare over £100,000.00. Just lets see if one law for them and another for us applies as normal.
John, Oldbury, UK West Midlands
Poor sod. No, I'm not talking about turf. Never mind. Plenty of after-dinner speaking engagements on "How I was stitched up" Severance payment. Think tank projects to bring to fruition. Time for reflection before reinstatement in 3 months time.
Theo Nelson, South Hams,
Brown should have invited Hain to step down when this scandal first came to light. His dithering is another sign of poor judgment.
Richard, London, England
No-one seems to be able to explain to me why Hain would need to raise quite so much money to fund his bid for a job that hardly anyone wants
Mikey, Bromley, Kent
At last - a possibility that the law of the land as it applies to politicians might be tested in a real court.
It's a pity a jury never got to hear any of the cash for honours evidence.
MarkS, Leeds,
Presumably he'll be using the sword of truth and shield of British justice.
David Leslie, Perth, Scotland
One down, plenty more to go! Not missing you already! I suggest if found guilty of wrongdoing, his pension should be forfeited in order to send a signal to the rest. I'm not going to hold my breath though. Public servants aren't they and logical solutions do not apply in their case!
R.B., Leicester,
Good, now let's get rid Wendy Alexander and Harriet Harman!
Ian, Bristol,
Ah!
The trust sword of truth. Now he can go and dig up the pitch at Lords.... Or engage in some other gesture politcs...
Austin Tassletine, South West, UK
Why did bottler Brown not sack the man no if's no buts
John, Lancaster, England
Has he resigned from all his offices, or is this just a bone for the dogs?
His career has been a tale of personal ambition before the public good, and we won't miss him.
Richard Cooper, Dunstable,
About time too.!
His offence is being caught out by the very rules he instigated.
Martin Briggs, Heversham, England
What a shame that he couldn't have resigned BEFORE the Police investigation was announced.
Just another example of this government's total lack of moral values and ethics.
Mick Collins, Colchester,