Former hereditary peer Jamie Sempill, who was due to stand in Edinburgh Central at the May Scottish Parliament elections, said the main reason for his resignation was a business opportunity which had presented itself. He is to help organise a major international clan gathering in two years' time.
But he said the Tories in Scotland had failed to grab enough media attention and criticised the "slightly lacklustre" performance of MSPs.
He said: "We are not really considered that relevant in terms of the forthcoming election. We are not considered as major players."
His comments come as Tory activists met in Perth for the start of the party's annual spring conference, already overshadowed by scathing criticisms of Conservative MSPs in a leaked memo from Shadow Scottish Secretary David Mundell.
The memo lamented "the simple lack of thinkers" on Tory benches at Holyrood, claimed Scottish Tory leader Annabel Goldie was attracting unfavourable comment for her "lack of activity and strategic thought" and said the replacement of Scots party chairman Peter Duncan was an "immediate priority".
One party source was today quoted saying the Tory MSPs could no longer work with Mr Mundell and adding: "He is certain to be booed by everyone in Perth. He'll be lucky not to get slapped."
Mr Cameron was expected to give his unequivocal backing to Ms Goldie at the conference today.
Mr Sempill said he could not have done justice to fighting the election in May because of his new business venture.
He said: "The main reason I'm standing down is to because I have an amazing opportunity on the business front to set up a large international clan gathering in 2009.
"I've been involved in these things before and they take a huge amount of planning, particularly in the early stages, which is now."
But he admitted to discontent with the Tories' position in Scotland.
"I think it's more to do with frustration than unhappiness - frustration because we are not considered that relevant in terms of the forthcoming election. We are not making any headway.
"It is our own performance. We obviously have not established enough of a strong position to create sufficient attention."
"In fairness, the current Conservative MSPs have done a solid job of being active members of the parliament,"
But he said the impression they created was "if anything, slightly lacklustre".
He said: "We've been in the parliament for eight years, but somehow it's just not having any resonance, it's not getting through.
"We have had David Cameron in the south who has been getting substantial media attention. If anything, he might be considered long on media attention and short on other things.
"I have watched him on the occasions he has been up here and you can see people are drawn to him. But it just doesn't seem to be converting itself much further than that.
"Annabel is an amazing, bright, capable lady. You could say Cameron is long on charisma and maybe she isn't. But if there's a charisma issue that's as relevant to the Holyrood contingent regardless of which party."
Mr Sempill - a former hereditary peer, now without a seat in the Lords - stood in Edinburgh North & Leith in the 1999 Scottish Parliament elections and was due to be the candidate in Paisley South in 2003, but stood down to take a job in the United States.
The new Edinburgh Central Tory candidate is Fiona Houston, a leading member of the Save Inverleith Park Campaign against proposals for a skatepark.