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Mr. Wright is shown in Ottawa on Nov. 2, 2010. In part, he was drawn to Ottawa by Mr. Harper himself, with whom he shares much in common, including their backgrounds and values.Sean Kilpatrick/The Canadian Press

The Prime Minister's chief of staff has resigned over his role in the $90,000 bailout of former Conservative Senator Mike Duffy's expense account.

Nigel Wright issued a statement Sunday morning to announce his resignation, which Prime Minister Stephen Harper has accepted.

Mr. Wright repeated that he had not informed Mr. Harper of his decision to cut a cheque to Mr. Duffy as the PEI senator and former journalist was engulfed in a controversy over his expense account.

Mr. Wright left the private sector more than two years ago to work in Mr. Harper's office. He had initially refused to resign when news of the cheque came out last week. But the expense scandal has grown and hurt the image of the Harper government.

"In light of the controversy surrounding my handling of matters involving Senator Duffy, the Prime Minister has accepted my resignation as Chief of Staff," Mr. Wright said.

"My actions were intended solely to secure the repayment of funds, which I considered to be in the public interest, and I accept sole responsibility. I did not advise the Prime Minister of the means by which Mr. Duffy's expenses were repaid, either before or after the fact," he said.

The Prime Minister issued his own statement afterward.

"It is with great regret that I have accepted the resignation of Nigel Wright as my Chief of Staff. I accept that Nigel believed he was acting in the public interest, but I understand the decision he has taken to resign. I want to thank Nigel for his tremendous contribution to our Government over the past two and a half years," Mr. Harper said in a statement.

The new chief of staff is expected to be Mr. Harper's long-time aide Ray Novak.

The opposition was all over the government as soon as news of the resignation came out, hoping to force a broad inquiry into the events, including who was aware of the cheque and whether the payment was done to avoid the release of embarrassing information.

"Nigel Wright needs to come clean on the details of the deal he negotiated to cover up for Senator Duffy's expense claims and whitewash the Senate committee report," NDP MP Charlie Angus said in a statement. "With so many unanswered questions and serious allegations, more than ever we need an independent investigation to determine exactly what happened."

The Liberal Party said the investigation needs to go all the way up to Mr. Harper and his knowledge of events.

"There is no room under the bus for any more scapegoats," Liberal MP Ralph Goodale said in a statement. "This stinks from beginning to end. The Prime Minister's wilful blindness is a travesty. All threads lead to him and only he can provide full accountability."