Wendy Alexander today announced her resignation as Labour leader in Scotland after being found guilty of failing to declare donations to her leadership campaign last year. She had been in the post for barely nine months.

In a statement she delivered before journalists and TV cameras at the party's Glasgow headquarters, Alexander said the row over the donations had become a distraction and cast herself as the victim of a partisan decision by Holyrood's standards committee that was a “breach of natural justice”.

“I hope the events of recent days will lead to reflections by all MSPs and parliament officials on the appropriateness, objectivity and effectiveness of our current procedures," she said. “I acted in good faith and the written advice of parliamentary authorities."

Alexander, who marked her 45th birthday on Friday, is one of Gordon Brown’s closest political allies and the sister of Douglas Alexander, the international development secretary.

She is the third Scottish Labour leader to be forced to resign in recent years. Her predecessor Jack McConnell quit after the party lost the Scottish parliament elections in May and in 2001 Henry Mcleish stood down as leader and Scottish first minister after it emerged he had claimed £36,000 in Commons allowances to fund his constituency office while he had been sub-letting it.

Alexander's exit comes as Brown marks his first anniversary in power against a backdrop of dismal poll ratings and Labour coming fifth in the Henley by-election, trailing even the BNP.

She had been facing the prospect of a one-day suspension from the Scottish Parliament after failing to declare on time almost £8,000 of donations to her campaign.

Alexander’s troubles began last November when it emerged she had accepted an illegal donation of £950 from a Jersey businessman, who was not a UK voter. That prompted a complaint to Holyrood’s standards commissioner into her failure to list other donations towards her £16,000 campaign chest on her MSPs register of interests.

Despite prosecutors deciding earlier this year that she would not face any criminal charge, the commissioner concluded she had broken the rules on declarations.

Alexander had been told by parliamentary clerks that no declaration was necessary, but this advice proved flawed.

Last week, a cross-party committee recommended that she be suspended from parliament for a single day as punishment.

However, as the recommendation was made on the last day of the parliamentary term, the sentence cannot be ratified until MSPs return in September, leaving Alexander under a cloud all summer.

Labour accused the SNP members on the committee of drawing out the process to cause Alexander maximum political damage.

Alexander spent most of Friday, her 45th birthday, in crisis talks with colleagues at Labour’s Scottish HQ in Glasgow.

It is understood she wanted to resign immediately, but was dissuaded by her aides.

She also received numerous messages of support from MSPs by phone and text.

Late on Friday, colleagues said she had decided to carry on in the face of a politically-motivated verdict, but this morning she learned she faced another inquiry as a result of publicly discussing the first before it had concluded.

Alexander’s departure means that the party north of the border will be without a leader during a Westminster by-election contest in Glasgow East.

David Marshall, the seat’s veteran MP, stepped down this week on health grounds.

At the last election, he gained 60.7% of the vote and had a majority over the SNP of 13,507, making it one of Labour’s safest seats. It would take a 22% swing to the Scottish National party for it to fall to the nationalists, but the SNP has delivered a bigger upset in the city before. In 1988 Jim Sillars took Glasgow Govan with a 33% swing from Labour.

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