Both said they could no longer support the current government.

Nadhim Zahawi, the former Education Secretary, has been appointed as the new Chancellor by Prime Minister Boris Johnson with Steve Barclay, a former Treasury Chief Secretary, taking over as Health Secretary. 

No 10 has recently been hit by a number of damaging issues including the ‘partygate’ fines and, more recently, accusations about the behaviour of the deputy chief whip Chris Pincher MP.

Mr Sunak said in a resignation letter to Prime Minister Boris Johnson today: “It is with deep sadness that I am writing to you to resign from the Government. 

“To leave ministerial office is a serious matter at any time. For me to step down as Chancellor while the world is suffering the economic consequences of the pandemic, the war in Ukraine and other serious challenges is a decision I have not taken lightly.

“However the public rightly expect government to be conducted properly, competently and seriously. I recognise this may be my last ministerial job but I believe these standards are worth fighting for and that is why I am resigning.”

He goes on to mention private disagreements with Mr Johnson without giving details but adds it is important the Prime Minister and Chancellor remain united in hard times and that both want a “low tax, high growth economy and world-class public services." However he adds that their approaches are "fundamentally different.”

He added in his letter: “I am sad to be leaving the Government but I have reluctantly come to the conclusion that we cannot continue like this.”

Mr Sunak became Chancellor in 2020 after serving previously as Chief Secretary to the Treasury. He is also MP for Richmond in Yorkshire. There have been questions raised about his wife’s non-domiciled status but she has agreed to pay more UK tax.

Sajid Javid MP was Chancellor from 2019 to 2020 and was Home Secretary prior to that. He resigned as Chancellor after being pressed to dismiss his advisers.

• It is believed that Works and Pensions Secretary Therese Coffey will be remaining in the Cabinet.

• This is a developing story. Please check back for updates.