Merkel's cabinet favourite is forced out by plagiarism row

Karl-Theodor zu Guttenberg announced his decision days after Bayreuth University revoked his doctorate.

It said he had violated academic standards in his thesis on constitutional politics by failing to credit sources.

Mr Guttenberg, who initially called the allegations "absurd," later admitted "grave mistakes" but denied deceiving anyone.

Ms Merkel stood by him for nearly two weeks after the allegations surfaced in the tabloid press, arguing they had no bearing on his job at defence.

However, a steady drip of allegations forced Guttenberg to admit the scandal was beginning to overshadow policy issues, such as German involvement in Afghanistan and a review of the military. He was even labelled "Dr Googleberg" by critics.

Announcing his resignation yesterday, he said: "It is the most painful step of my life. I am drawing the consequences that I have and would have demanded of others.

"Like others, I have to stand by my weaknesses and mistakes. I will gladly concede to my opponents that I was appointed not to be the self-defence minister, but the defence minister."

Ms Merkel said she accepted "with a heavy heart" the resignation of the 39-year-old, long rated Germany's most popular politician, whose wife Stephanie is the great granddaughter of the founder of the unified German state, Count Otto Von Bismarck. Ms Merkel said Mr Guttenberg was "a person with outstanding political talent, with an exceptional ability to reach people's hearts and enthuse them for politics".

Mr Guttenberg is a member of the Christian Social Union, the Bavaria-only sister party to Ms Merkel's Christian Democratic Union. The CSU itself doesn't face voters this year, but Mr Guttenberg had been expected to campaign for her party.

The aristocratic Mr Guttenberg became the rising star of Germany's centre-right after being thrust into Ms Merkel's cabinet two years ago as economy minister. He built a reputation as a plain-speaker and man of action and won the defence portfolio after the 2009 election.

In recent months, he pushed through a plan to end conscription - part of an effort to slim down the German military.

Last night, Germans appeared to agree it was time for him to go."I think it's a pity because he was a good minister," said Monika Schmid, from Wangen in his home state of Bavaria.

"At the end of the day, however, it was right - because you just can't do that, plagiarise a thesis."

The opposition berated Ms Merkel for clinging to Mr Guttenberg even amid a growing outcry from the academic world.

However, she held out hope of a comeback.

"I am convinced that we will, in whatever form, have the opportunity to work together in the future," she said.

Merkel ditched by text

Chancellor Angela Merkel was caught off guard by her defence minister's decision.

Ms Merkel was touring the CeBIT computer trade fair in Hanover when journalists noticed she was being texted just after 9am - about an hour before the news broke. She appeared taken aback by what she read. She then did her best to conceal the news from reporters, even sharing jokes with economy minister Rainer Bruederele. Then, at about 10am, she suddenly excused herself and went to her car for a telephone call. At the end of the tour, as the first news of Guttenberg's resignation spread, one journalist shouted a question to her, but she walked away.