British defence secretary Liam Fox resigned on Friday over his friendship with a businessman who posed as his adviser, jolting Prime Minister David Cameron's coalition government and potentially slowing down efforts to reform the military.
Fox, a darling of the right of Cameron's ruling Conservatives who oversaw Britain's military operations in Afghanistan and Libya, admitted he had allowed the lines between his personal and professional life to blur.
The British media have in the last week been awash with stories about the relationship between Fox and his former flatmate and best man, Adam Werritty, who met frequently with Fox at the defence ministry and on his official trips abroad.
"I mistakenly allowed the distinction between my personal interest and my government activities to become blurred," Fox said in a resignation letter to Cameron.
"The consequences of this have become clearer in recent days. I am very sorry for this."
The loss of Fox amid accusations of impropriety could open Cameron up to allegations of sleaze, a failing that helped fatally undermine the last Conservative-led government in a 1997 election, relegating the party to opposition for 13 ensuing years.
However, pending any further revelations about Fox's conduct, his departure is not seen as a fatal blow to the government.
"It's a setback for the government but not destabilising ... This is embarrassing for the government, it doesn't help their reputation, but it's not a fundamental game changer," said Wyn Grant, politics professor at the University of Warwick.
Cameron had given Fox, 50, his support pending the findings of an inquiry, due within days, into whether he had broken ministerial rules by allowing Werritty to benefit financially from their friendship or have access to classified information.
In a letter, Cameron said he was "very sorry" to see Fox go, and praised the "superb job" he had done.
"You have overseen fundamental changes in the Ministry of Defence and in our Armed Forces, which will ensure that they are fully equipped to meet the challenges of the modern era," Cameron said in a letter to Fox.
"On Libya, you played a key role in the campaign to stop people being massacred by the Gaddafi regime and instead
win their freedom."
With Fox no longer defence minister, relations with Cameron may not be so cordial in future. Fox challenged Cameron for leadership of the Conservative Party in 2005, and the prime minister now faces the prospect of a powerful and charismatic rival on his party's backbenches.
Fox is the flag bearer for the Conservatives' vocal right-wing and could become a source of friction for Cameron, who is already under attack from right-wingers who accuse him of ceding too much ground to the centre-left Liberal Democrats, the Conservatives' junior partners in coalition rule.
"While he (Fox) may not have credibility as a leadership contender, he could undermine David Cameron from the back benches," said Steven Fielding, director of the Centre for British Politics at Nottingham University.
Cameron will be under pressure to appoint another right-winger to replace Fox, while media sources tip Transport Secretary Philip Hammond. A government source said a successor was likely to be named later on Friday and that a major ministerial reshuffle was not expected.
Fox's successor would have to implement a radical and difficult plan to slim down and reconfigure the military, as well as manage the eventual return of British troops from Afghanistan and take decisive action during future conflicts.
The government last year announced an eight percent cut in real terms to the 34 billion pound ($53.7 billion) defence budget over four years, and many of the initiatives Fox outlined to reduce costs have yet to be implemented.
Other government departments received cuts of up to 20 percent, and the defence ministry's more lenient treatment was seen partly as a result of Fox winning a fierce and public spat with the treasury (finance ministry).
"Keeping a handle on the budget, particularly the equipment budget, requires constant political care and attention .... You need strong leadership and willingness to take hard decisions which will offend people," said Malcolm Chalmers of the Royal United Services Institute defence thinktank in London.
"The danger is that if there isn't strong pressure from the secretary of state to keep the defence budget under control, then that role will devolve back to the treasury," he said, adding that would lead to confusion on procurement.
Defence firms are already in the throes of trying to readjust to new procurement policies introduced under Fox, including a "name and shame" initiative for defence firms who do not stick to time and cost constraints, and a push for firms to develop less specialised, more exportable hardware.
New defence ministry management will add another unwelcome layer of uncertainty, defence firms say.
($1 = 0.633 British Pounds)