Press Complaints Commission (PCC) chair Peta Buscombe has resigned, as the phone-hacking scandal claims another "convenient scalp".
The media watchdog chief had previously feared the PCC would become a scapegoat for its failure to prevent wrongdoing at the News of the World tabloid.
Now she has bowed to pressure to quit by announcing her decision not to stand for another three-year term when her first period in the job comes to an end at the end of the year.
"In the interim, she will continue her work of promoting industry reform, before handing over to a replacement after a candidate has been approved," the PCC said in a statement on its website.
It added that it expected Baroness Buscombe to contribute to the judge-led inquiry into phone-hacking as "an expert on media regulation".
"I am pleased that the commission want me to continue in post until my successor has been appointed," she said.
"Thereafter, I will be able to be a campaigner for change from outside the organisation. I wish to contribute to the Leveson inquiry and participate fully in the overall debate regarding reform, unfettered by my role as chairman of the PCC."
Baroness Buscombe had resisted pressure to go over phone-hacking in late 2009, when lawyer Mark Lewis made allegations about wrongdoing at the News of the World.
The last month has seen her defend the PCC as being "grossly undervalued" after Ed Miliband called it a "toothless poodle" and David Cameron labelled it "ineffective".
"The public needs the existing work of the PCC to continue and be built upon," Baroness Buscombe added.
"I have worked as chairman to ensure that we give real help (both before and after publication) to members of the public, who otherwise would have no-one to turn to.
"The staff of the PCC are unsurpassed in terms of the effort and intelligence they bring to their work."
Seven newspaper editors sit on the board of the PCC, leading to accusations that it has struggled to be independent of newspaper journalists' judgement.
The Liberal Democrats were quick to dismiss Baroness Buscombe's contribution, however.
"The PCC has clearly failed. It was limited in its powers and its ambition. What we need now is a bold regulator that editors can't ignore," the Lib Dem parliamentary party's culture, media and sport committee said.
"Several people involved in the phone-hacking scandal have already paid for their mistakes, with one notable exception. James Murdoch should now be considering his position. Peta Buscombe joins a list that should grow longer yet."
Baroness Buscombe's resignation is the latest in a series of exits triggered by the phone-hacking scandal.
News International's chief executive Rebekah Brooks, Metropolitan police commissioner Sir Paul Stephenson and Rupert Murdoch's lieutenant Les Hinton all resigned as a result of the revelations.
Baroness Buscombe was appointed to the post in April 2009, having previously been chief executive of the Advertising Association and a frontbench spokesperson for the Conservatives in the Lords.