Scandal-hit Prince Andrew to step down as UK trade envoy emissary

Revelation that provoked calls for his resignation was his continued friendship with financier Jeffrey Epstein

The Duke of York's days as the UK's special trade emissary, which has brought him into contact with leaders of some of the world's least democratic regimes, are coming to a close.

Buckingham Palace confirmed yesterday evening that the Duke is to step down from the role, though he will continue to support Britain's interests aboard during official overseas trips as a member of the Royal Family. A spokeswoman said: "The role as Special Representative will no longer exist as the Duke of York has decided to relinquish it after 10 years." The 51-year-old Duke, the Queen's second son, has done a lot of travelling and met a lot of people since he took over as Special Representative for Trade and International Investment in 2001, after 22 years as a Royal Navy helicopter pilot. He was never paid a salary for his role as trade representative, but the treasury paid his travel expenses, which – according to the published accounts of the royal household – came to more than £350,000 for five trips that he made during 2010-11.

He has met Saif Gaddafi, son of the Libyan dictator, several times since 2007, and met Colonel Gaddafi himself during a visit to Tunisia in 2008 – though as his defenders point out, it was Government policy to deal with the Libyan regime at the time.

In March, it emerged that he had hosted a lunch in Buckingham Palace for Sakher el-Materi, the 29-year-old son-in-law of Tunisia's President Zine al-Abidine Ben Ali, just three months before the Tunisian government was brought down by the demonstrations in January that started the Arab spring.

The Duke is also on good terms with Timur Kulibayev, whose father-in-law is President of Kazakhstan and who paid a generous £15m – £3m more than the guide price – for Sunninghill Park, the Duke and Duchess of York's former marital home. And Abu Dhabi's rulers think so highly of him that last year they gave him free use of a four-bedroom town house, said to be worth £1m.

But the revelation that provoked calls for his resignation last March was his continued friendship with an American financier, Jeffrey Epstein, who was sentenced to 18 months in prison in Florida for soliciting prostitution. The billionaire hedge fund manager was reported to have had sexual contact with a large number of teenage girls, many of whom have civil cases against him.

The Duke has known Epstein for years. In 1999, he invited the financier and his girlfriend Ghislaine Maxwell, daughter of the disgraced media mogul Robert Maxwell, to Balmoral. He also met Victoria Roberts, whom Epstein hired as a "travelling masseuse" when she was 15 years old. There is no evidence that the Duke knew Epstein was an alleged child molester before the offences came to light, but he certainly should have known by last December, when he flew to New York to spend four days as Epstein's guest. His office also knew that last year Epstein paid £15,000 to Johnny O'Sullivan, the former personal assistant to the Prince's former wife, Sarah Ferguson, to help the Duchess sort out of her mounting debts.

These indiscretions led to open calls for the Duke's resignation from the Labour MPs, Chris Bryant, a former foreign minister, and Mike Gapes, who chaired the Commons foreign affairs committee. A leaked letter to William Hague from Stephen Day, former ambassador to Tunisia, urged that an "entirely new role should be found for him as soon as possible".

And the Business Secretary Vince Cable said that there were to be "conversations" about the Duke's future. But a statement from Downing Street said that David Cameron was "fully supportive" of the Duke's role. Yesterday it was reported that he will retain a trade role based in the UK and this could see him promoting apprenticeships and possibly entrepreneurs.