Andy Coulson resigns as communications director for British Prime Minister David Cameron

One of British Prime Minister David Cameron’s closest advisors resigned Friday amid a stubborn scandal over a tabloid newspaper’s alleged attempts to hack into the cellphones of politicians, celebrities and aides to the royal family.

The resignation of communications director Andy Coulson, a member of the inner circle at 10 Downing St., was an embarrassing blow for Cameron as he gears up for a year of brutal spending cuts and other difficult challenges facing his coalition government.

Coulson’s decision to step down stems from his time as editor of the weekly News of the World, one of the many low-market journals in Britain that specialize in celebrity gossip and sensational news. During his tenure, one of the paper’s reporters was convicted of illegally accessing messages left for staff members of the royal family, including some from princes William and Harry.

Coulson resigned from the editorship over the incident, in 2007. But he has firmly maintained that he knew nothing about the hacking.

In an investigation by the New York Times published in September of last year, however, a former reporter at the British paper described such tactics as being rife and alleged that Coulson was aware of them. Besides the royal aides, targets of the alleged campaign included professional athletes, movie stars and political figures.

The article prompted police to bring Coulson in for questioning. Britain’s top prosecutor announced last month, however, that there was insufficient evidence to file charges against him.

Although Cameron has stood by his chief spin doctor throughout the affair, matters worsened in recent days with allegations that more editors at the News of the World knew that phone hacking was taking place.

The accusations put Coulson back into the spotlight. His resignation Friday came as little surprise to many political observers.

“Continued coverage of events connected to my old job at the News of the World has made it difficult for me to give the 110% needed in this role.... When a spokesman needs a spokesman, it’s time to move on,” Coulson said in a statement, adding that he would leave the job in a few weeks.

Cameron expressed regret over the loss of a key aide.

“I’ve always felt he’s been punished for the same offense twice,” Cameron told reporters. “But I quite understand his decision and wish him well for the future.”

Ed Miliband, the leader of the opposition Labor Party, said Cameron had made a mistake in keeping Coulson on the job even as damaging accusations continued to swirl around him.

“He’s now done the right thing, but he should have done it earlier,” Miliband told Sky News. “It raises real questions about David Cameron’s judgment that he hung on to Andy Coulson as long as he did.”

henry.chu@latimes.com