Lord Wakeham

Lord Wakeham has stepped aside from his role as head of the press complaints watchdog.

The temporary move came after his role in the collapse of US energy giant Enron came under increasing media scrutiny.

Describing his decision as a "matter of honour", Wakeham said he wanted to protect the PCC from damaging speculation.

The peer, often described as a "safe pair of hands", had been facing calls to stand aside as head of the Press Complaints Commission until his role in the collapse of Enron has been clarified.

The former Tory minister is expected to give evidence to two separate Congressional investigations into the collapse of the energy firm. He had been employed as a non-executive director of the collapsed energy firm since 1994.

Wakeham, a qualified accountant, was reported to be earning £80,000 a year with the company as a member of the board's audit committee.

He said: "As chairman of the Press Complaints Commission for the past seven years, I am only too aware of the damage that can be done to individuals and institutions that are thrust into the public spotlight.

"Since the collapse of Enron, I have been unable to make any statement or undertake any interviews on the subject for legal reasons. I am conscious that some see this position as incompatible with the chairmanship of the commission.

"I am very proud of everything we have achieved at the PCC and do not wish it to be damaged by continuing short-term speculation. I therefore see it as a matter of honour to stand aside temporarily from the chairmanship of the commission until the report of the Independent Investigating Committee of Enron is published and evaluated.

"I am co-operating actively with these inquiries. I will not be making any further statement."

Number 10 was informed of his decision and the prime minister's official spokesman said the issue was "entirely a matter for the PCC".

The Liberal Democrats had earlier called on Wakeham to stand aside from his role until the matter was resolved.

Nick Harvey, the party's culture, media and sport spokesman, said: "Lord Wakeham must have developed a sensitivity to these issues at the PCC. I am sure he can see the advantage of stepping down voluntarily at this stage while matters are clarified."