A close aide of London Mayor Ken Livingstone resigned on Tuesday after fresh allegations were published about misuse of public funds.
Lee Jasper, the mayor's race advisor, said he was quitting to put a stop to a "relentless" media campaign.
"It has become clear that a number of matters which are not of first importance in London are being used to distract from the crucial questions in the election campaign," he said in his letter of resignation.
Livingstone is running for a third term as mayor in elections on May 1 in a bitterly fought race against Boris Johnson, his Conservative rival. Opinion polls show they are running neck and neck.
The Evening Standard says millions of pounds of public money have been given in grants to community projects run by friends of Jasper, with little or nothing to show for the money.
On Tuesday, the paper said Jasper had sent intimate emails to a women involved with organisations which he had recommended receive more than 100,000 pounds of grants.
The paper said Jasper had not declared the relationship, as required by the Greater London Authority's (GLA) code of ethics.
The woman told the paper there was no impropriety in the payments. She said sexual content in the emails was just banter.
A GLA spokesman said Jasper had played a leading role in the authority's campaign against racism and black gun crime.
"No evidence has been presented for the criminal allegations presented by the Evening Standard," the spokesman said.
"However Lee Jasper has stated that in light of material published today that he has tendered his resignation.
"The mayor has accepted it."
Boris Johnson said the resignation was further proof that Livingstone "has had his day".
"Londoners deserve to know where their hard-earned cash has gone," he said.
