The Prime Minister was forced to remove Damian McBride, his long-standing but controversial spin-doctor, after the private emails were obtained by a right-wing blogger.
Mr Brown took the view that there was "no place in politics for the dissemination or publication of material of this kind", Downing Street said.
Mr McBride, 34, used his official No 10 email address to suggest the leaking of damaging allegations about a number of Tories, including Mr Cameron and George Osborne. He also proposed a story concerning an unwarranted personal slur on George Osborne's wife Frances.
A Tory backbencher, Nadine Dorries, is planning to sue Mr McBride after learning that she was the subject of a "salacious" allegation relating to her and a senior Tory, which she said was untrue.
They were sent to the prominent Labour blogger Derek Draper and, although they were private, they suggested possible "stories" on a future Labour-supporting "attack blog", Red Rag. However, the emails were obtained by Paul Staines, who writes a right-wing Westminster blog under the name Guido Fawkes.
Labour sources believe Mr Draper's email account was hacked into, although the messages were copied to at least one other person.
Former Home Secretary Charles Clarke had earlier called on the Prime Minister to sack Mr McBride for bringing "shame" to the Labour Party.
Downing Street announced shortly before 5pm yesterday that Mr McBride had resigned, though it was clear he had been sacked.
A No 10 spokesman said: "Neither the Prime Minister, nor anybody else in Downing Street, had knowledge of these emails. It is the Prime Minister's view that there is no place in politics for the dissemination or publication of material of this kind, which is why it is right that Mr McBride and Mr Draper took the decision not to publish this material and regrettable that others are choosing to do so."
Mr McBride, who began working for Mr Brown as a Treasury civil servant, said in a statement that he was "shocked and appalled" at the way his emails had been used.
He added: "I have already apologised for the inappropriate and juvenile content of my emails, and the offence they have caused, but I did not want these stories in the public domain – it is because Paul Staines has put them there, and I am sickened that he has done so. However, we all know that when a backroom adviser becomes the story, their position becomes untenable, so I have willingly offered my resignation."
The row has brought to a head the ongoing war between the right and left in political blogging. Mr Staines hinted at the existence of the emails on Thursday, by posting "He who lives by the smear..." next to a picture of Mr McBride. Shortly after the resignation was announced yesterday, he wrote: "Mission Accomplished: McBride Fired."
The swift action by the Prime Minister came as a surprise to some MPs because Mr McBride had been a close and loyal aide for more than a decade. Mr Brown has a reputation for fiercely protecting his inner circle.
It is unremarkable that members of political parties plan dirty tricks campaigns against their opponents. Mr Brown had little choice, however, but to remove him, because of the salacious nature of the emails.
Mr McBride's closeness to the Prime Minister meant the emails had the potential to drag Mr Brown into the row.
Mr Draper told the BBC: "You are hanging a man for sending a silly email to a mate. Is that really fair?"
But the shadow Home Secretary, Chris Grayling, said: "This whole episode has been quite disgraceful. This resignation is a clear admission that Gordon Brown's team at No 10 was involved in a deliberate attempt to spread unpleasant false rumours about opposition politicians. Gordon Brown needs to provide a clear explanation about what happened."
Last year Mr McBride was moved from his role as the PM's press secretary after divisions emerged in the Downing Street operation.
Damian McBride
The spin-doctor who became the story was 'shocked and appalled' that his emails were obtained by a right-wing blogger
Nadine Dorries
Tory backbencher is the subject of one 'salacious' email involving her and a male senior Tory. She has read the email and plans to sue for defamation
Charles Clarke
Was the first Labour figure to call on the Prime Minister to sack Mr McBride. The spin-doctor had brought 'shame' to the Labour Party, he said
Paul Staines aka Guido Fawkes
Right-wing blogger and scourge of the political establishment who obtained the emails. Posted yesterday: 'Mission Accomplished: McBride Fired'
Derek Draper
The former adviser to Peter Mandelson was sacked in 1998 over the Lobbygate scandal. 'Why hang someone for sending a silly email to a mate?' he said
The 'lies and innuendo' that McBride was peddling
The emails begin with a BlackBerry message from Damian McBride on 13 January 2009 at 18.34. He wrote:
Gents, A few ideas I've been working on for Red Rag. For ease, I've written all the below as I'd write them for the site, but obviously Andrew will want to adapt for his own house style, length, etc. The first one is a solid investigative story, so may be a good one to use early. The other three are gossipy and mainly intended to destabilise the Tories. I'm not sure how to set up easy links in the copy of the text, so I've stuck in the full links below each bit of relevant text. Damian
Mr McBride then suggests a "solid investigative story" about a gay Tory MP promoting his companion's business interests in the Commons, suggesting that it "may be a good one to use early". The other three, he admits, "are gossipy and mainly intended to destabilise the Tories".
On David Cameron:
"He could clear up exactly how much the Camerons are worth ... and he could make clear that he's not hiding any embarrassing illnesses."
On George Osborne:
"Embarrassing photos have followed George Osborne around throughout his career: posing in his Bullingdon Club uniform at Oxford, lying on the carpet at home in his permed mullet playing Monopoly with his fellow viscounts ... But he knows that the most embarrassing photos from his past have yet to emerge."
Derek Draper replied:
Sent 13 January 2009 at 18.56. To: Damian McBride Subject: Re: Rag [UNCLASSIFIED] [Non-Record]
These are absolutely totally brilliant Damian. I'll think about timing and sort out the technology with Andrew so we can go asap. Do we want to tip off anyone about Red Rag having set up? Walters? I could do it and say LabourList had been sent the link anonymously. PS: Don't forget LabourList, Damian!
From Damian McBride
I think Red Rag should appear with no preview – as you say – but with a good initial story and with LabourList then mentioning that the bug is catching ... Tom was going away today after a chat with me to work on a couple of insiderish announcements for LabourList about appointments to Labour HQ and No10. I'm working on a couple of other things as well ... we've got to keep the momentum going over the weekend – it's been brilliant so far.
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