Former Labour minister Elliot Morley is to quit as an MP after claiming £16,800 in taxpayer-funded allowances for interest on a mortgage he had already paid off.
Mr Morley announced his decision not to fight the seat at the next general election after a meeting with local party activists in his Scunthorpe constituency.
He said: "It is with regret that I have today informed the General Committee of the Scunthorpe Constituency Labour Party and the party general secretary that I do not wish to contest this seat at the next election.
"This is my choice after discussing this with my family and constituency party officers. The last two weeks have been traumatic for me and I have to think of my family and my health, both of which have suffered.
"Nor do I want in any way to undermine the strong position the Labour Party has in this constituency in what will be a crucial election."
The ex-environment minister is presently suspended from the Parliamentary Labour Party pending a sleaze watchdog investigation and a possible police inquiry.
He blamed the 18-month false claim, which he has repaid, on "sloppy accounting".