The director general of Fás, Rody Molloy, resigned last night after days of controversy over the spending of more than €640,000 by the State training agency on transatlantic travel over a four-year period.
In a statement last night the board of Fás said it had been informed by Mr Molloy of his intention to resign with immediate effect.
"It is with regret that the board has accepted Mr Molloy's resignation," said the statement. It added: "Mr Molloy informed the board that he made this decision after long and difficult consideration, believing it to be in the best interest of Fás."
The chairman of the board, trade union leader, Peter McLoone said: "I would like to acknowledge that this was a difficult personal decision for Mr Molloy, and that he has made it in the best interests of Fás.
"The board would like to thank Mr Molloy for the major contribution he has made to the development of Fás during his stewardship, which came during a time of significant change. As a result of his leadership we believe the organisation is well positioned to play a continuing important role in the Irish economy and society as we face into a very challenging period." The statement added that the appointment of an acting director general for an interim period pending the recruitment of a full-time successor to Mr Molloy would be announced shortly.
"Fás will continue its co-operation with the Public Accounts Committee's investigations and will co-operate with the forthcoming inquiry by the Comptroller and Auditor General into past events," it concluded.
The Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan, confirmed she had received notice of the resignation .
In a statement the Tánaiste thanked him for his many years of public service both in the Department of Enterprise, Trade and Employment and, for the past eight years, as director general of Fás.
The Tánaiste acknowledged his major contribution to the development of Fás during his tenure, which included significant change for the organisation as the State's employment and training agency.
Reacting to the resignation, Fine Gael leader Enda Kenny said the Taoiseach had seemed indifferent and unaware of the seriousness of the matter. "The real issue remaining is the Taoiseach's clear lack of judgment in relation to this matter."
Discussions had taken place all day yesterday between officials of the Department of Enterprise, Mr Molloy and the chairman of Fás, the trade union leader, Peter McCloone.
Ms Coughlan, who was on a trade mission to Dubai, spoke by phone to Mr Molloy and Mr McLoone about the controversy over expenditure of public funds at the authority.
Earlier in the Dáil, Taoiseach Brian Cowen accepted that there were questions to be asked about the spending by senior Fás officials.
Questioned by Mr Kenny, Mr Cowen said he would not stand over any profligate or unauthorised spending. "Obviously, there are questions to be answered. This needs to be dealt with as urgently and expeditiously as possible," he added.
The Public Accounts Committee of the Dáil was due to question Mr Molloy tomorrow about his exependitures and that of other senior Fás executives in Florida and elsewhere in the US. The head of the board audit committee at Fás, Niall Saul is also due to appear before the committee.
The PAC began its inquiry into Fás in the wake of an internal audit report that found apparent breaches of procurement rules by the corporate affairs division at Fás.