BSkyB shares in London fell about half a percentage point on the news of his resignation, and the Murdoch family's News Corp. fell about the same at the open in New York.

CNN: James Murdoch resigns as BSkyB chairman

Monday's government challenge to Mr Mandelson's fightback was led by Home Secretary Jack Straw, who is understood to have called Mr Blair on the eve of the former Northern Ireland secretary's resignation to point out inconsistencies in his colleague's statements - helping to seal his fate.

BBC: Mandelson inquiry 'over in weeks'