Ms Nayler, 36, left the National Heritage Memorial Fund yesterday after being removed from the post of accounting officer - hers by right as head of a public body - making her position untenable.
The announcement follows the recent scandal over the purchase in April of the Churchill archive for pounds 12.5m.
It is an embarrassing end to an impressive career. Ms Nayler joined the fund13 years ago as a secretary, and within seven years had been appointed director of the whole organisation on a pounds 47,000 salary. Last year her job expanded hugely when the fund took control of the newly created lottery budget worth more than pounds 150m a year, bringing her total budget to pounds 250m.
But she became the subject of a Department of National Heritage inquiry after Simon Stillwell, with whom she has a personal relationship, was awarded contracts worth almost pounds 40,000 for consultancy work at the fund.
The first was awarded to SIMNO Software Services, the company owned and operated by Mr Stillwell, in February 1993 after a competitive tender. This contract was fully reported in writing to the department and approved by the chairman of the NHMF, Lord Rothschild.
But a second pounds 35,000 contract for the company to draw up user requirement specifications for computer software was not put out to tender or reported to the department or Lord Rothschild.
Ms Nayler was aware of the second contract although she was not involved in its award. However, a statement issued last night by the NHMF observes: "As she has now acknowledged, she could have forbidden it."
The second contract was given to SIMNO despite a recommendation from the DNH after the award of the first contract that it should not happen again to prevent "the risk of criticism".
The NHMF statement stresses that the DNH permanent secretary, Hayden Phillips, said after the inquiry there was "no evidence of misappropriation of public funds" and no evidence Ms Nayler "acted in any way illegally or dishonestly".
But it continues: "Nevertheless, the trustees and the director recognise that . . . an accounting officer responsible for public funds must, at all times, carry out his or her duties and responsibilities beyond criticism and that in this case, she has laid herself open to criticism."Reuse content