The UK's top civil servant has stepped aside from his role leading an inquiry into Downing Street lockdown parties, after it emerged an event was held in his own office.
Simon Case had been due to report on claims Covid-19 rules were broken at events for staff last year.
But his role was put into doubt after reports a party was held in his office while London was under Covid-19 rules.
No 10 said the probe would be concluded by senior civil servant Sue Gray who is the second permanent secretary at the Department for Levelling Up, Housing and Communities.
A spokesperson for No 10 said: "To ensure the ongoing investigation retains public confidence the cabinet secretary [Simon Case] has recused himself for the remainder of the process".
The person said Gray would "ascertain the facts and present her findings to the prime minister".
The BBC understands a quiz was held for members of Case's private office on 17 December 2020, and invites were sent out titled "Christmas Party!"
About 15 people were invited to the gathering at 70 Whitehall, near Downing Street, although it is understood not everyone turned up.
Responding to the claims, a government spokesperson said: "Staff in the cabinet secretary's private office took part in a virtual quiz on 17 December 2020.
"A small number of them, who had been working in the office throughout the pandemic and on duty that day, took part from their desks, while the rest of the team were virtual.
"The cabinet secretary played no part in the event, but walked through the team's office on the way to his own office.
"No outside guests or other staff were invited or present. This lasted for an hour and drinks and snacks were bought by those attending. He also spoke briefly to staff in the office before leaving."
'Corruption and sleaze'
The party was first reported on the Guido Fawkes website on Friday afternoon.
Case, who has been cabinet secretary since last September, had been asked by Prime Minister Boris Johnson to investigate gatherings for staff in government buildings last year.
His inquiry was focusing on events in Downing Street on 27 November, 15 December and 18 December, and at the education department on 10 December.
Labour's deputy leader Angela Rayner said she was "incredibly disappointed" Case "didn't come clean" when he was first tasked to investigate alleged parties in Downing Street - and that his replacement Gray has an "incredible responsibility to restore trust".
Rayner said the issue of departmental parties now appeared to be "endemic" but that it was the prime minister who "set the tone" for the government and had "allowed it to happen under his watch".
Byelection loss adds more pressure
Meanwhile, Johnson said he took personal responsibility for the loss of a Conservative stronghold in an election defeat that showed public dismay over a litany of scandals and stepped up pressure on the British prime minister from mutinous lawmakers.
The Conservatives had won every previous election for the mostly rural area of central England since the constituency was created in its current form in 1983. Conservative lawmakers have been dominant in the region for nearly 200 years.
The defeat was described as "a kicking" for the Conservative Party, substantiating fears among some that its reputation and electoral prospects are now suffering under Johnson.
The centrist Liberal Democrat candidate, Helen Morgan, won the North Shropshire seat by nearly 6000 votes, overturning a 23,000-vote Conservative majority from 2019.
"Tonight, the people of North Shropshire have spoken on behalf of the British people. They have said loudly and clearly, 'Boris Johnson, the party is over'," Morgan said in her victory speech.
Johnson, responding to the loss, said he understood the frustration felt by voters over what he described as "a constant litany of stuff about politics and politicians".
"Clearly the vote in North Shropshire is a very disappointing result and I totally understand people's frustrations. I hear what the voters are saying in North Shropshire and in all humility I have got to accept that verdict," he told reporters.
"Of course I take personal responsibility."
Opinion polls show Conservatives, who still have a large majority in parliament, falling behind their main rivals, the Labour Party, following an outcry over lawmakers' second jobs, criticism of the way Johnson funded the lavish refurbishment of his flat, and a surge in Covid-19 cases.
- BBC / Reuters