Andy Coulson has resigned as the prime minister's director of communications (Photo: David Moir, Reuters)

Andy Coulson announced today that he had quit as the prime minister's director of communications, citing growing questions about his role in illegal phone hacking during his time as the editor of the News of the World.

Speculation about Coulson's future picked up steam during Friday morning, after Downing Street told the press that the public relations chief would be issuing a "personal statement" within hours. His resignation was confirmed in the statement, released shortly before 12pm GMT.

"I can today confirm that I've resigned as Downing Street director of communications. It's been a privilege and an honour to work for David Cameron for three-and-a-half years," said Coulson, who has always denied being aware of the illegal interception of phone messages during his four-year tenure at the News International tabloid.

Coulson reportedly told David Cameron of his decision on Wednesday evening, just two days after the PM took to the airwaves to defend his embattled communications director.

Coulson said that he was "extremely proud" of his role in the Conservative Party and the Government. But he said that the News of the World phone-hacking scandal - which has escalated dramatically in recent weeks - had proven to be an insurmountable distraction.

"Unfortunately, continued coverage of events connected to my old job at the News of the World has made it difficult for me to give the 110% needed in this role. I stand by what I've said about those events but when the spokesman needs a spokesman, it's time to move on.

"I'll leave within the next few weeks and will do so wishing the Prime Minister, his family, and his brilliant and dedicated team the very best for what I'm sure will be a long and successful future in Government."

Despite backing his own earlier statements regarding the affair, rumours have already begun to circulate about a potentially explosive trigger for his resignation. Sources told Channel 4 today that Ian Edmondson, a senior News of the World executive who was suspended last month due to allegations that he ordered the interception of phone messages, "was about to turn Coulson in".

Coulson resigned from the News of the World in 2007, after the paper's royal editor Clive Goodman was convicted alongside the private investigator Glenn Mulcaire for hacking phones in the royal household.

Coulson - while accepting ultimate responsibility for the crimes that took place during his editorship - denied knowing Mulcaire personally or overseeing the interception of phone messages. He repeated his denials under oath last month.

Both he and the tabloid maintain that Goodman was a "rogue reporter".

Coulson joined David Cameron's team later in the same year. But in recent months, he has been dogged by persistent suggestions that phone hacking at the News of the World was not only widespread at the publication, but conducted with the knowledge and consent of senior executives - including Coulson himself.

Despite the gathering storm, Cameron continued to praise the work of his former communications chief.

"I am very sorry that Andy Coulson has decided to resign as my Director of Communications, although I understand that the continuing pressures on him and his family mean that he feels compelled to do so," the prime minister said in a statement today.

"Andy has told me that the focus on him was impeding his ability to do his job and was starting to prove a distraction for the Government.

"During his time working for me, Andy has carried out his role with complete professionalism. He has been a brilliant member of my team and has thrown himself at the job with skill and dedication."

Coulson's announcement today means that he has now resigned from two high-profile positions as a direct result of a scandal in which he claims to have had no involvement.

Media Spy discussion: News of the World phone-hacking scandal