The crucial moment came after furious lawyers accused Ms Rayner of trying to make them “scapegoats” for her underpaying tens of thousands of pounds in stamp duty.

Ms Rayner’s hold on her job had been looking increasingly tenuous after Sir Keir refused to rule out sacking her yesterday, insisting he would “act” on the findings from Sir Laurie.

The departure is another massive blow for the PM, already struggling to stabilise his government after a torrid summer of immigration protests.

She also appears to have resigned as deputy Labour leader – a separate elected post – triggering what could be a deeply divisive contest.

The PM’s official spokesman confirmed that Sir Keir has now received the report from Sir Laurie.

“The Prime Minister will read it and act upon it. He has a reputation for being comprehensive and quick,” the spokesman said.

Senior figures have spent the past few days rallying around Ms Rayner since her extraordinary admission that she had failed to pay enough stamp duty.

Some have even suggested she is being persecuted for her working class background.

Touring broadcast studios this morning, trade minister Douglas Alexander said he believed Ms Rayner was in politics for the “right reasons” – but her tax issues were being put through a “rigorous testing process”.

Ms Rayner gave a tearful interview on Wednesday in which she laid the blame for her troubles on her lawyers.

The row escalated again last night after high street conveyancing firm Verrico & Associates insisted they had acted “on the figures and the information provided by Ms Rayner”.

In a withering condemnation, the family firm’s 82 year-old Managing Director Joanna Verrico said they were being made scapegoats and added: “I have got the arrows stuck in my back to show it.”

Meanwhile, Sir Keir Starmer indicated he is ready to sack Ms Rayner if she has broken the ministerial code.

Update: Rayner was found to have broken the ministerial code. From the Telegraph.

Angela Rayner broke the ministerial code by failing to pay the correct amount of stamp duty on her seaside flat, the ethics watchdog has found.

In his letter to the Prime Minister, Sir Laurie Magnus, the Independent Adviser on Ministerial Interests, said: “It is highly unfortunate… that Ms Rayner failed to pay the correct rate of SDLT on this purchase, particularly given her status and responsibilities as the Secretary of State for Housing, Communities and Local Government and as Deputy Prime Minister.

“She believed that she relied on the legal advice she had received, but unfortunately did not heed the caution contained within it, which acknowledged that it did not constitute expert tax advice and which suggested that expert advice be sought.”

Sir Laurie said it was “deeply regrettable that the specific tax advice was not sought”, adding: “I believe Ms Rayner has acted with integrity and with a dedicated and exemplary commitment to public service.

“I consider, however, that her unfortunate failure to settle her SDLT liability at the correct level, coupled with the fact that this was established only following intensive public scrutiny, leads me to advise you that, in relation to this matter, she cannot be considered to have met the “highest possible standards of proper conduct” as envisaged by the Code.

“Accordingly, it is with deep regret that I must advise you that in these circumstances, I consider the Code to have been breached.”

Read Rayner’s resignation letter in full:

And Starmer’s handwritten response:

Source