Despite the desire of Gordon Brown to keep Peter Hain and his often-expressed support for his colleague, once the Metropolitan Police let it be known that they were going to investigate, his resignation was inevitable.

He contacted the Prime Minister at 11.30 to tell him what was happening, and he offered his resignation without hesitation. If he had not, he would have been told to go.

What the Prime Minister desperately wants to avoid is for this resignation to cause a domino effect throughout the Labour Party. To that end, today's events do leave some senior Labour figures feeling rather uncomfortable.

Harriet Harman (Leader of the House of Commons and Labour Deputy Leader), as we know, had to return a £5,000 donation and she also apologised when she failed to register a £40,000 home loan she used to fund her campaign. Wendy Alexander (Labour's leader in Scotland) has been in trouble for receiving an overseas donation that was out of order.

This resignation leaves the door open for others to point at these figures and say: 'If Hain's had to resign, then they, too, should go.' This is exactly what Mr Brown wanted to avoid.

It also damages the credibility, once again, of Brown's Government being a businesslike administration which gets things done - an image the Prime Minister was desperate to portray when he replaced Tony Blair.

As well as the current impending investigation into Peter Hain, another - and very significant - police investigation is taking place into the £600,000 donations made through intermediaries by the North East businessman David Abrahams, which has already led to the resignation of Labour's General Secretary Peter Watt.

On a much more basic level, today's resignation will result in a Cabinet reshuffle which Mr Brown himself wanted to avoid. He started his Premiership saying that his was not going to be a reshuffle-a-year man. He will now be forced into such a reshuffle.

But despite all of this, you won't see any gloating from the Conservatives about today's development, as more than a few Tories are a little worried about the prospect of investigations into their own senior figures. In particular, the Parliamentary Commissioner for Standards is looking at the question of donations to (Shadow Chancellor) George Osborne's private office.

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