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Iain Overton, managing editor of the Bureau of Investigative Journalism, has resigned from his position following the organisation's role in the failed Newsnight investigation into child abuse at a North Wales Care home.
Overton, whose tweet first alerted the public to the Newsnight programme which wrongly linking Lord McAlpine with child abuse, resigns two days after the BoIJ said it had suffered a "breach of its standards" during its contribution to the Newsnight Programme.
Overton's Twitter account was temporarily deleted following the fallout, but later reappeared to confirm his resignation.
The BBC programme which aired on 2 November falsely alleged that a "senior Thatcher-era Tory" abused children at the Bryn Estyn care home. Although he was not named on the programme, Lord McAlpine's name was widely circulated on the internet and social media as the alleged abuser.
The claims were later completely dismissed after the accuser Steve Messham apologised to McAlpine when he realised he was not the man who abused him.
Messham said McAlpine was the victim of mistaken identity after he was shown a photo of the former Tory treasurer by police.
The BoIJ said in a statement: "Iain Overton has resigned his appointment as editor of The Bureau of Investigative Journalism. Deputy editor Rachel Oldroyd will assume responsibilities for editorial control of The Bureau. An appointment of an interim editor is likely to be announced in the near term.
"An inquiry to establish the role of The Bureau in the story is in urgent progress. An interim report will be issued as soon as possible.
"Trustees reaffirm The Bureau's commitment to fact-based, non-sensational investigation in the public interest. Any role by the Bureau or its officers in this story was strictly contrary to the fundamental principles and standards of the Bureau."
"It is with deep sadness that the Trustees have announced that they have accepted the resignation of Iain Overton from his position as the editor in chief of the Bureau of Investigative Journalism.
"The Bureau was launched and built up under Iain's editorship. Iain has played a pivotal role in the Bureau's success to date. Under his editorship the Bureau has gained a reputation for quality journalism as well as winning awards.
"His resignation is a real tragedy. He has always shown tireless commitment to the Bureau and we thank him for all his hard work."
The news follows from the announcement that BBC News director Helen Boaden and deputy Stephen Mitchell will "stand-aside" from their roles following the Newsnight scandal despite the BBC making it "absolutely clear" the pair had nothing to do with the failed Newsnight investigation into McAlpine.
In what is being dubbed as a crisis at the BBC, the corporation is also under fire after it emerged its former director-general George Entwistle will be paid £450,000 following his resignation.
Lee said following the dismissal of the Newsnight investigation: "The Bureau of Investigative Journalism was established to apply the highest standards of investigative and fact-based journalism in the public interest.
"The Bureau was named as a contributor to the broadcast of a BBC Newsnight programme on November 2 on child abuse in North Wales.
"The Trustees are appalled at what appears to be a breach of its standards. To the extent that the principles of The Bureau have been ignored by an involvement in this story, remedial action will be taken against those responsible.