British Communities Secretary Hazel Blears announced on Wednesday she was resigning, adding to the impression that Labour Prime Minister Gordon Brown was losing control of his party.
"Today I have told the prime minister that I am resigning from the government," Blears, who is responsible for local government affairs, said in a statement.
Her resignation, on the eve of European and local elections in which Brown's government faces a rout, added to the impression of a government in disarray amid the fallout from a scandal over politicians' allowances and with a general election due within a year.
Blears last month agreed to pay more than 13,000 pounds (INR 1,005,830) in tax on the sale of a property after newspaper disclosures about lawmakers and their expenses.
A source close to Interior minister Jacqui Smith said on Tuesday that she also would leave the cabinet at a government reshuffle expected soon after Thursday's election.
"The timing of this is so wounding for Brown. Who is there now to bring in to government?" said Simon Lee, politics professor at Hull University in northern England.
Smith's reputation suffered in March when a leaked copy of her parliamentary expenses claims showed she had charged taxpayers for her husband's rental of two pornographic movies.
The resignations came as the Guardian newspaper, traditionally supportive of Labour, called for Brown to go.
"The truth is that there is no vision from him, no plan, no argument for the future and no support," it said.
Britons are furious that many members of parliament have milked the allowances system, claiming from taxpayers the cost of everything from duck houses to cleaning a moat at a time when many voters are struggling in a recession.
Polls show support for Labour, in power since 1997, sliding to record lows and the opposition Conservatives on track to win the next national election that Brown must call by June 2010.
(Reporting by Adrian Croft, Frank Prenesti; Editing by Keith Weir)