The British anti-corruption minister, Tulip Siddiq, on Tuesday resigned following weeks of questions over her financial ties to her aunt, Sheikh Hasina, who was removed as prime minister of Bangladesh in 2024.

The minister had repeatedly denied any wrongdoing, and Prime Minister Keir Starmer last week stated that he had full confidence in her.

The resignation of a second government minister in two months is a blow to Starmer, whose approval ratings have plunged since his Labour Party won a general election in July last year.

Siddiq was handed the portfolio for financial services policy after the election, a role that included responsibility for measures against money laundering.

In a letter to Starmer, the minister said she was resigning because her position was likely to be a distraction from the work of the government.

The government’s ethics adviser said in his letter to Starmer, released at the same time, that although Siddiq had not breached the ministerial code of conduct, he found it regrettable that she was not more alert to the potential reputational risks from her family’s close association with Bangladesh.

“You will want to consider her ongoing responsibilities in light of this,” he said.

The ousted Bangladesh prime minister, who had ruled the country since 2009, is being investigated on suspicion of corruption and money laundering.

However, Hasina and her party deny wrongdoing.

In a statement, the head of the press office of Bangladesh’s interim government, Muhammad Yunus, said that while Siddiq may not have fully understood the origins of certain assets she enjoyed in London, she knows now and should seek forgiveness from the people of Bangladesh.

The government reaffirmed its commitment to returning stolen funds to the people of Bangladesh, saying investigations were underway with international partners to recover assets tied to corruption.

Siddiq was named in December as part of Bangladesh’s investigation into whether her family was involved in the siphoning of funds from Bangladeshi infrastructure projects.

The anti-corruption commission alleged financial irregularities worth billions of dollars in the awarding of a $12.65 billion nuclear power contract, saying Hasina and Siddiq may have benefited.