The British minister responsible for financial services and combating corruption resigned on Tuesday after weeks of reports of financial ties to her aunt Sheikh Hasina, who was ousted as Bangladeshi prime minister last year, Reuters reports.
Tulip Siddiq, 42, has repeatedly denied the allegations and Prime Minister Keir Starmer said last week he has full confidence in her.
The second ministerial resignation in two months is a major blow to Starmer, whose approval ratings have plummeted since his Labour party won the election in July.
Siddiq has handed over his financial services role, a role that included responsibility for anti-money laundering measures.
Starmer has named Emma Reynolds, the former pensions minister, as his successor.
Hasina, who has led Bangladesh since 2009, is under investigation for corruption and money laundering. Hasina and her party have denied the charges.
Siddiq was named last December as part of an investigation in Bangladesh into whether her family was involved in thefts at infrastructure projects in Bangladesh.
The Anti-Corruption Commission suspects billions of dollars in corruption in a $12.6 billion nuclear reactor project, saying Hasina and Siddiq may have benefited.
Documents show that Siddiq lived in north London in a property given to her family in 2009 by Moin Ghani, a Bangladeshi lawyer representing Hasina's government.
She also accepted another property in London in 2004, without buying it, from a developer linked to Hasina's political party, the Financial Times reported this month.
Hasina had fled Bangladesh after being ousted by weeks of protests.
