She had referred herself to the prime minister’s standards adviser, Sir Laurie Magnus, after questions about links to her aunt, who was ousted last year as Bangladesh’s prime minister.

Sir Laurie said he had “not identified evidence of improprieties” but it was “regrettable” that Siddiq had not been more alert to the “potential reputational risks” of the ties to her aunt.

Siddiq said continuing in her role would be “a distraction” for the government but insisted she had done nothing wrong.

AaBefore her resignation was announced, Siddiq had been named in a second investigation in Bangladesh.

Conservative leader Kemi Badenoch has said the prime minister “dithered and delayed to protect” her.

Writing on X, she said: “It was clear at the weekend that the anti-corruption minister’s position was completely untenable. Yet Keir Starmer dithered and delayed to protect his close friend.

“Even now, as Bangladesh files a criminal case against Tulip Siddiq, he expresses ‘sadness’ at her inevitable resignation.

“Weak leadership from a weak prime minister.”

In a letter accepting Siddiq’s resignation, Sir Keir said the “door remains open” for her.

Siddiq, whose role as Economic Secretary to the Treasuryincluded tackling corruption in UK financial markets, was named last month in an investigation into claims her family embezzled up to £3.9bn from infrastructure spending in Bangladesh.

Her aunt is the former Bangladeshi prime minister Sheikh Hasina, head of the Awami League, who fled into exile after being deposed last year.

Siddiq, Labour MP for Hampstead and Highgate, also came under intense scrutiny over her use of properties in London linked to her aunt’s allies.

The Financial Times reported that one of the properties, a flat in King’s Cross, had been given to her by a person connected with the recently ousted Bangladeshi government.

According to the Mail on Sunday, in 2022 Siddiq had denied the flat was a gift and insisted her parents had bought it for her and had threatened the paper with legal action preventing publication of a story.

Labour sources subsequently told the newspaper the flat had been gifted to Siddiq by a property developer with alleged links to her aunt.

Sir Laurie spent eight days investigating the allegations after Siddiq referred herself to the standards watchdog.

In his letter, Sir Laurie said Siddiq “acknowledges that, over an extended period, she was unaware of the origins of her ownership of her flat in Kings Cross, despite having signed a Land Registry transfer form relating to the gift at the time”.

He said the MP “remained under the impression that her parents had given the flat to her, having purchased it from the previous owner”.

This had led to the public being “inadvertently misled” about the identity of the donor of the flat, added Sir Laurie.

Sir Laurie said this was an “unfortunate misunderstanding” which had led to Siddiq issuing a public correction of “the origins of her ownership after she became a minister”.

In the letter, Sir Laurie said: “A lack of records and lapse of time has meant that, unfortunately, I have not been able to obtain comprehensive comfort in relation to all the UK property-related matters referred to in the media.

“However, I have not identified evidence of improprieties connected with the actions taken by Ms Siddiq and/or her husband in relation to their ownership or occupation of the London properties that have been the subject of press attention.

“Similarly, I have found no suggestion of any unusual financial arrangements relating to Ms Siddiq’s ownership or occupation of the properties in question involving the Awami League (or its affiliated organisations) or the state of Bangladesh.

“In addition, I have found no evidence to suggest that Ms Siddiq’s and/or her husband’s financial assets, as disclosed to me, derive from anything other than legitimate means.”

In Bangladesh, there is an ongoing anti-corruption probe based on a series of allegations made by Bobby Hajjaj, a senior political opponent of Siddiq’s aunt Hasina.

Court documents seen by the BBC show that Hajjaj accused Siddiq of helping her aunt to broker a deal with Russia in 2013 that over-inflated the price of a new nuclear power plant in Bangladesh.

She attended the power plant’s signing ceremony and was pictured with Russian President Vladimir Putin.

Sir Laurie said Siddiq had “explained the context” of that visit as “solely for the social purpose of joining family and enjoying the tourist access to the city facilitated as a result of her aunt’s official visit as head of state”.

He said Siddiq had been clear that she had “no involvement in any inter-governmental discussions between Bangladesh and Russia or any form of official role”.

“I accept this at face value,” he said, “but should note that this visit may form part of investigations in Bangladesh.”

Sir Laurie added that Siddiq was a “prominent member of one of the principal families involved in Bangladesh politics” which had “exposed her to allegations of misconduct by association”.

“Given the nature of Ms Siddiq’s ministerial responsibilities… it is regrettable that she was not more alert to the potential reputational risks – both to her and the government – arising from her close family’s association with Bangladesh,” he said.

In a letter responding to Siddiq, Sir Keir said he accepted her resignation “with sadness” and thanked her for her “commitment” during her time as a minister.

He said Sir Laurie had assured him that “he found no breach of the ministerial code and no evidence of financial improprieties on [Siddiq’s] part”.

Sir Keir’s Holborn and St Pancras constituency is next door to Tulip Siddiq’s Hampstead and Highgate seat.

They were both elected MPs for the first time in 2015 and have enjoyed a close working relationship.

Labour MP Emma Reynolds has been appointed the new Economic Secretary to the Treasury to replace Siddiq.

Reynolds first became an MP in 2010, before losing her seat in 2019. She returned to parliament in 2024’s general election after a stint as managing director at a financial and professional services lobbying firm.

Ahead of her resignation, Siddiq had been named in a second investigation in Bangladesh.

Bangladesh’s Anti-Corruption Commission filed a “First Information Report”, which the BBC has seen. The document names Tulip Siddiq as part of allegations against Sheikh Hasina and her administration.

The Anti-Corruption Commission alleges that Siddiq assisted her mother, Rehana Siddique, in influencing Hasina to “misuse her power and secure a plot in the highly valuable diplomatic area of East-Purachal New Town”.

The document says that Rehana Siddique “concealed her ownership of properties within the RAJUK area in Dhaka city”.

In relation to Tulip Siddiq, the document says: “Ms. Tulip Rizwana Siddique…used her special powers, to directly influence and assist Ms. Sheikh Hasina, the former Prime Minister of the People’s Republic of Bangladesh…influencing her to misuse her power as the highest official and public servant of the government to breach the trust criminally and, through her, influenced the public servants in charge of the project allocation.”

A spokesperson for Tulip Siddiq said: “No evidence has been presented for these allegations. Tulip Siddiq has not been contacted by anyone on the matter and totally denies the claims.”

In a post on X, the Conservative Party leader said: “It’s time for Keir Starmer to sack Tulip Siddiq,” adding that the PM had “appointed his personal friend as anti-corruption minister and she is accused herself of corruption”.

It follows comments from Bangladesh’s new leader, Muhammad Yunus, who told the Sunday Times that Siddiq should apologise after reports she had lived in London properties with links to her aunt, Sheikh Hasina, who was deposed as prime minister of Bangladesh last year and is at the centre of a corruption probe.

Siddiq has referred herself to the prime minister’s standards adviser and has insisted she has done nothing wrong.In a letter to Sir Laurie Magnus, who polices standards among government ministers, she said: “I am clear that I have done nothing wrong.”

Downing Street previously confirmed Sir Laurie would now conduct a “fact-finding” exercise to determine if “further action” was needed, including a further investigation.

In a post on X, the Conservative Party leader said: “It’s time for Keir Starmer to sack Tulip Siddiq,” adding that the PM had “appointed his personal friend as anti-corruption minister and she is accused herself of corruption”.

Badenoch said Siddiq had become “a distraction when the government should be focused on dealing with the financial problems it has created”.

She added: “Now the government of Bangladesh is raising serious concerns about her links to the regime of Sheikh Hasina”.

In an interview with the Sunday Times, Bangladesh’s leader said that properties used by Siddiq should be investigated and handed back to his government if they were gained through “plain robbery”.

Siddiq is economic secretary to the Treasury and responsible for tackling economic crime, money laundering and illicit finance.

The allegations are part of a wider investigation by Bangladesh’s Anti-Corruption Commission (ACC) into Hasina, who was in charge of Bangladesh for more than 20 years, and was seen as an autocrat whose government ruthlessly clamped down on dissent.

Since fleeing the country Sheikh Hasina has been accused of multiple crimes by the new Bangladeshi government.

In her letter to Sir Laurie Magnus following the allegations Siddiq said: “In recent weeks I have been the subject of media reporting, much of it inaccurate, about my financial affairs and my family’s links to the former government of Bangladesh.”

“I am clear that I have done nothing wrong,” she said, adding: “However, for the avoidance of doubt, I would like you to independently establish the facts about these matters.

Meanwhile, Sir Keir told reporters he had confidence in his minister, adding Siddiq had “acted entirely properly” by referring herself for investigation.