Grant Shapps has quit as international development minister amid claims he failed to act on allegations of bullying, Downing Street has said.
Claims have engulfed the Conservatives following the apparent suicide in September of a youth activist.
Mr Shapps told the prime minister the “buck should stop with me” concerning issues while he was party co-chairman.
Youth organiser Mark Clarke has rejected allegations of bullying, sexual assault and intimidation.
He had been in charge of a campaigning initiative called RoadTrip which bussed young volunteers around the country.
The party has been subject to allegations since Elliott Johnson, 21, was found dead.
In his resignation letter, Mr Shapps said neither he or the party could find any record of written allegations of bullying, sexual abuse or blackmail made to the chairman’s office before the general election in May.
The Welwyn Hatfield MP added: “I cannot help but feel that the steady stream of those who raised smaller, more nuanced, objections should have perhaps set alarm bells ringing sooner.
“In the end, I signed that letter appointing Mark Clarke ‘director of RoadTrip’ and I firmly believe that whatever the rights and wrongs of a serious case like this, responsibility should rest somewhere.
“Over the past few weeks – as individual allegations have come to light – I have come to the conclusion that the buck should stop with me.”
He said he was “deeply shocked and saddened” by Mr Johnson’s death.
Mr Clarke had been struck off a list of approved Tory election candidates after complaints were made about his behaviour in 2010 and in his letter, Mr Shapps acknowledged having given him a “second chance”.
Nick Hurd, the MP for Ruislip, Northwood and Pinner, is to replace Mr Shapps as international development minister.
In his response to Mr Shapps’s letter, Prime Minister David Cameron said he had made a “lasting contribution” to the both Tories and government, and paid tribute to his dedication and campaigning before the election.
Earlier, he said Mr Johnson’s death was a “tragic loss of a talented young life” and Downing Street said the prime minister was awaiting the results of an internal investigation.
But Mr Johnson’s father had called for an independent and external inquiry for Mr Shapps to stand down.
Earlier this month, Mr Clarke was banned for life from the Conservative Party.
But he says he strongly rejects all allegations against him.
“I believe that these false allegations and this media firestorm are related to the events surrounding Elliott’s sad death,” he said.
“As such I will be co-operating with the coroner and providing him with the fullest information. This is the proper process. After the inquest I will look to take legal action for defamation in respect of these allegations.”
The Conservative Party has said that it received no written complaints until this summer about Mr Clarke’s behaviour.
However, former chairwoman Baroness Warsi says she wrote to Mr Shapps, her successor, in January asking for action to be taken against Mr Clarke.
Mr Johnson also says he had no confidence in current party chairman Lord Feldman, who is conducting the internal inquiry and called for him to stand down from his position amid claims he too did not respond to warnings about Mr Clarke.
Reacting to Mr Shapps’ resignation Mr Johnson told BBC Newsnight reporter James Clayton: “I’m pleased he’s taken the correct decision. It should have happened weeks ago.
“There are still questions about what happened after May when Shapps left CCHQ [Conservative Campaign headquarters]. Many of the complaints came in in August.”
Labour says the row raises questions about how the Conservative Party conducts itself and said Lord Feldman has “serious questions to answer about when exactly he was made aware of concerns”.
Shadow minister Jonathan Ashworth said: “Every day seems to bring new questions with suggestions that warnings of bullying were ignored by senior Conservatives.
“We need a fully independent inquiry – not one led by a Tory insider – to look at culture and practices.”
Grant Shapps profile
Grant Shapps was appointed international development minister after the Conservative election victory in May.
MP for Welwyn Hatfield since 2005, he was made housing minister in the coalition government in 2010 and two years later Conservative co-chairman and a Cabinet Office minister.
Mr Shapps, 47, has a very different background to other top Tories.
Born in Watford, and schooled at the local grammar and Manchester Polytechnic, Mr Shapps’ father was a graphic designer.
His brother Andre joined their cousin, the former Clash guitarist Mick Jones, in his band Big Audio Dynamite.
He started a successful printing business in his 20s and in the 1997 election stood unsuccessfully against Liberal Democrat Simon Hughes.
The revelation that Mr Shapps once had an alias – Michael Green – under which he wrote self-help guides for a website operated with his wife Belinda – has also attracted headlines.