Sir Malcolm Rifkind is to quit as an MP at the general election amid fresh pressure over cash-for-access allegations following an undercover sting.
The Tory former foreign secretary said he had also stepped aside as chair of the parliamentary Intelligence and Security Committee.
The veteran politician said the allegations against him were “contemptible” but that it was better for the party and his Kensington constituency if he did not seek to stand in 2015.
He had the party whip suspended pending an internal investigation as to whether he should remain the candidate for May’s poll.
“I had intended to seek one further term as MP for Kensington, before retiring from the House of Commons,” he said in a statement. “I have concluded that to end the uncertainty it would be preferable, instead, to step down at the end of this Parliament.
“This is entirely my personal decision. I have had no such requests from my constituency association but I believe that it is the right and proper action to take.
“As regards the allegations of Channel 4 and the Daily Telegraph I find them contemptible and will not comment further at this time.
“Although I will retire from Parliament I shall continue my public and political life and am much looking forward to doing so over the years to come.”
Both politicians have denied that their comments to undercover reporters from Channel 4’s Dispatches and the Telegraph broke Commons rules and have asked the Parliamentary Standards Commissioner to investigate.
Prime Minister David Cameron had earlier declined to say whether he believed Sir Malcolm should stand down from his position as chairman of the Intelligence and Security Committee (ISC).
“I can’t interfere with that – it is a matter for the committee and the House of Commons,” he said.
In the first tranche of revelations, Mr Straw was filmed boasting of operating “under the radar” to use his influence to change European Union rules on behalf of a commodity firm which paid him £60,000 a year.
According to the Telegraph, Mr Straw also talked about privately lobbying Cabinet Office minister Francis Maude on behalf of Senator International, saying he had helped the office furniture firm “get on the ladder” and secure contracts to supply the Government.
He indicated he would probably take an executive position with the firm after the next election. “I happen to have helped them over the last four years anyway. I mean, without taking a penny from that,” Mr Straw said.
“But as a result of getting the name out … they’ve said would I be interested ultimately in going on the board?”
Mr Straw – who is stepping down at the election – said in a statement: “I have acted in accordance with the parliamentary rules at all times in respect of Senator International, as in all other respects. All of these matters will be scrutinised by the Parliamentary Commissioner.”
Kensington MP Sir Malcolm, who first entered Parliament in 1974 and served for more than a decade in the cabinets of Margaret Thatcher and John Major, dismissed allegations of wrongdoing as “unfounded” and vowed to fight them “with all my strength”.
But Labour’s Kim Howells, a previous chairman of the ISC, said he was “bewildered” that Sir Malcolm had time for outside work. “It became for me a full-time job, trying to get through that material and make sense of it,” he told BBC’s Newsnight.
Labour leader Ed Miliband seized on the row to call on David Cameron to join him in banning MPs from taking directorships and consultancies.
Labour MPs and prospective parliamentary candidates have already been warned that the party’s rulebook will be changed to stop them holding such posts after the May general election – a commitment that will be in the Labour manifesto.
Mr Miliband also revealed he was consulting on legislation to put the ban into law for all MPs and to impose a cap on outside income similar to that in place for members of Congress in the US, who may earn no more than the equivalent of 15% of a minister of state’s salary on top of their pay as politicians.
Party sources stressed that no figure has been set on the proposed cap, but the US example suggests that a level of around £5,000-£15,000 a year may be under consideration.
Mr Miliband told the BBC: “We’ve got to settle this issue of second jobs once and for all so we remove any suspicion that MPs are working not for their constituents’ interests but someone else’s interests.”
But the Prime Minister rebuffed Mr Miliband’s proposals, saying: “On the issue of outside jobs and outside interests, I think we do have very clear rules and they need to be properly enforced.
“I don’t favour a complete ban on all outside jobs or interests. I think Parliament is enriched by the fact that we have, whether it’s a GP doing some time in a practice, a minister who’s actually an obstetrician … or people who have small businesses or sit on other businesses and draw some interesting experiences from that that they can bring to the House of Commons.
“What I see from the Labour proposal is actually not outlawing outside business interests, but putting a new set of rules which, for instance, would allow someone to work as a trade union official but wouldn’t allow someone to run a family shop or a family publishing business or suchlike. I think that doesn’t make sense.”