Dr Tony Barrell, a distinguished safety expert, withdrew because he also holds a job which, according to the Health and Safety Commission, "could be thought to compromise" his position.
The Commission appointed Dr Tony Barrell to head the inquiry into the Southall rail crash in west London last month. The disaster occurred on track where Heathrow Express trains will run alongside mainline trains when the airport branch opens next year.
Dr Barrell is a non-executive director of BAA - which operates Heathrow and is behind the building of the new airport rail link. The work has already affected the signalling system near Southall. One signal used by trains is partially obscured by the Heathrow Express' new infrastructure, although it has not been suggested that this was a cause of the crash.
The crash happened when a Great Western train travelling from South Wales to Paddington, London collided with a freight train crossing its tracks. A few days after the accident, it was discovered the passenger train's most basic safety system, the Automatic Warning System (AWS), which gives an audible warning to drivers if they pass signals, was not working.
According to Channel 4 News, which broke the story, investigators are focusing on why there appeared to be a "breach in the chain of command". It appears that the signalman who let the freight train across did not know the high speed passenger train's AWS was not working. If he had, Channel 4 claimed, the freight train would never have been routed into the path of the Great Western service.
The driver of the train has also told investigators he had missed a signal because he was searching through his bag. According to Channel 4, staff in control rooms run by both Great Western and Railtrack, the company which owns the nation's track and signalling, have been questioned.
An HSC spokeswoman confirmed that Dr Barrell had approached the Commission and offered his resignation. Dr Barrell said, in the statement released by the HSC: "My position on the BAA board was made public at the outset, as was my continuing part in helping BAA work towards the highest safety standards.
"Nevertheless, because the scope of my work includes, among many other things, the Heathrow Express, I appreciate that it might be possible to misinterpret my position.
"I have therefore told Frank Davies, the HSC chairman, that I wish to withdraw as head of the Southall railway accident inquiry."
Mr Davies, chairman of the Commission, said: "It is with regret that HSC has accepted the withdrawal of Dr Barrell. He has acted very honourably by withdrawing from the inquiry and there is no possible reflection on his reputation.
"The Commission will make a new appointment which will be announced as soon as possible."