Scotland Yard's communications chief resigned today after the force decided to launch disciplinary proceedings against him over the awarding of a contract to an ex-News of the World executive.
Dick Fedorcio was facing gross misconduct allegations over the decision to hire the Sunday tabloid's former executive editor Neil Wallis to provide PR advice for the Metropolitan Police.
An investigation by the Independent Police Complaints Commission (IPCC) concluded that Mr Fedorcio had a "case to answer" over the procurement of the contract.
Mr Wallis's company Chamy Media was paid £24,000 by the Met for communications advice between October 2009 and September 2010.
Mr Fedorcio had been on extended leave from Scotland Yard since August pending the investigation into his relationship with the former News of the World executive, who was arrested on suspicion of phone-hacking last July but has not been charged.
The IPCC's report, which it sent to the Met on January 10, will be made public shortly.
IPCC deputy chair Deborah Glass said: "Our investigation found that Mr Fedorcio has a case to answer in relation to his procurement of the contract for Chamy Media.
"Last week the Metropolitan Police Service proposed to initiate proceedings for gross misconduct and I agreed with that proposal.
"In light of Mr Fedorcio's resignation today, those proceedings cannot now take place and I propose to publish our investigation report detailing our findings in the next few days."
Earlier this month the Leveson Inquiry into press standards heard that Mr Fedorcio invited people from leading PR firms Bell Pottinger and Hanover to submit rival bids for the contract that was awarded to Mr Wallis.
Chairman Lord Justice Leveson suggested that the Met head of public affairs chose these companies because he knew they would be more expensive than the former News of the World executive, adding: "The point is, this is set up to get a result."
Mr Fedorcio denied this, but confirmed that he initially wanted to award the contract to Mr Wallis without any competition.
Mr Wallis offered his services as a PR consultant to the Met over lunch with Mr Fedorcio in August 2009, the inquiry heard.
The Scotland Yard communications chief, whose deputy was on long-term sick leave at the time, discussed the possibility of hiring the ex-tabloid executive with then-assistant commissioner John Yates.
Mr Yates said Mr Wallis gave him "categorical assurances" that there was nothing about the News of the World phone-hacking case that could emerge later to embarrass the Metropolitan Police if he was given the job.
Mr Fedorcio said he only became aware that Mr Wallis was of interest to Scotland Yard over phone-hacking on the day of his arrest on July 14 last year.
Mr Yates has told the Leveson Inquiry he was "good friends" with Mr Wallis, and attended football matches and dined out with him.
Scotland Yard said it would not comment on any aspect of Mr Fedorcio's pay, including any pension package.