Investigations by the Guardian have undermined claims by NoW publisher News International that phone-hacking was down to one rogue reporter, the paper's royal editor Clive Goodman.
deputy political editor, commented: "Mr Coulson is thought to have concluded that his position has become untenable following a “drip drip” of disclosures over the activities of the newspaper while he was editor."
Coulson said in a personal statement: "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.
"I'm extremely proud of the part I've played in helping him reach No 10 and during the coalition's first nine months.
"Nothing is more important than the Government's task of getting this country back on its feet.
"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 per cent 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."
Guardian editor-in-chief Alan Rusbridger said: "This is the result of first class investigative reporting by one Guardian reporter, Nick Davies, sustained over a very long period of time. From the moment he revealed the secret payout to Gordon Taylor in July 2009 it was obvious that Andy Coulson's position was untenable. But this is not the end of the story by any means. There are many outstanding legal actions, and uncomfortable questions for others, including the police."
Telegraph deputy editor Benedict Brogan wrote on his blog on January 18: "I am told that he [Coulson] is viewed as one of the three most successful occupants of that post, the other two being Bernard Ingham and Alastair Campbell. If you want a measure of the esteem in which he is held by Dave and his Team, it is to hear them elevate Mr Coulson to membership of a trio with the other two recent big beasts to hold that role. He is considered, frankly, irreplaceable, even if those around him must know that no one is. His departure, they fear, would be a crushing blow to the work of the government at a critical time."
Guardian assistant editor Michael White writes on his blog today: "How awful that leaders need to employ red-top tabloid rascals like Coulson or Alastair Campbell, people say. Alas it's a wicked world out there. Politicians need to know what key red-top voters think about issues. They also need to keep red-top owners and editors sweet. Ed Miliband has hired Bob Roberts from the Mirror and Tom Baldwin from the Times."Sorry about that, but it's sensible. Not many people are tough enough to face the heat and pressure and street-smart enough to say 'sorry, that policy won't fly'."
David Cameron told BBC News of Coulson: "I feel he's been punished for the same offence twice."
- Piers Morgan on Twitter piersmorgan has defended Coulson and attacked the Guardian: "Very sad to hear news about Andy Coulson - good man, good friend. How many times does @guardian want people to quit over same thing?" and adding: "The Guardian has fried sources (Tisdall), used fake faxes (Aitken), run stolen prurient docs (Wikileaks - Gaddafi secret lovers)"
- Quotes of the Year: Phone hacking and the News of the World