The Taoiseach's special adviser, Mr Paddy Duffy, resigned last night after it emerged he was a director of a public affairs company which advised NTL on its purchase of Cablelink from two State companies.
Mr Paddy Duffy said he believed "my continued presence on the Taoiseach's staff might create a distraction which would not contribute to his work".
Mr Duffy came under intense pressure to quit after the Tanaiste, Ms Harney, described as "totally unacceptable" the fact that he was a director of Dillon Consultants, as revealed in The Irish Times yesterday.
Mr Duffy, a senior member of the political staff in Mr Ahern's office, has been a director of Dillon Consultants since last December. However, in his resignation statement last night he said he had had no involvement in NTL's bid for Cablelink. NTL bought Cablelink last month from RTE and Telecom Eireann for £535 million.
Mr Duffy said last night that he had signed documentation last year to make him a director of Dillons. He had originally intended to leave his post as special adviser in December 1998 and came to an agreement on this with Dillon Consultants.
However, he says he then changed his mind, but "through a series of misunderstandings on my part I was still registered as a non-executive director".
Mr Duffy told The Irish Times on Wednesday that Mr Paul Dillon had made him a non-executive director last December without his knowledge, but that when he discovered this he had asked Mr Dillon to have his name removed from the list of directors and that Mr Dillon had done this.
Mr Duffy said last night that in retrospect: "I should have resigned before becoming a non-executive director of Dillons; I should have confirmed that my name was not listed as being a non-executive director before completing my January 1999 return to the Public Offices Commission; I should have informed the Taoiseach and Minister Mary O'Rourke of the full facts of my contacts with Dillon."
Dillon Consultants had organised a series of meetings between senior NTL figures and what an NTL spokeswoman yesterday called "key influencers in the country". These meetings included one with the Taoiseach some 18 months ago, according to NTL.
However, the NTL spokeswoman said the company recalls no contact with Mr Duffy on any of these matters.