Canadian Prime Minister Justin Trudeau's top adviser quit on Monday amid allegations of political interference in the criminal prosecution of engineering giant SNC-Lavalin.
One of the key architects of Trudeau's 2015 electoral win and his longtime friend, Gerry Butts said he resigned as the prime minister's principle secretary to avoid distractions for the government facing another tough ballot fight in eight months.
In a statement, Butts "categorically" denied accusations that he personally applied undue pressure on former attorney general Jody Wilson-Raybould for an out-of-court settlement with the firm.
"Any accusation that I or the staff put pressure on the attorney general is simply not true," he said, but added: "It is in the best interests of the office and its important work for me to step away."
For weeks, Trudeau's government has been rocked by the meddling allegations first reported by the Globe and Mail, citing unnamed sources.
The political crisis deepened last week with Wilson-Raybould's surprise resignation, and the launch of an investigation by the independent ethics commissioner.
Opposition members of the Commons justice committee also sought to put a spotlight on the issue, but the Liberals used their majority to block motions to have Butts and other senior government officials testify. The committee is to discuss the issue again on Tuesday behind closed doors.
Montreal-based SNC-Lavalin was charged in 2015 with corruption for allegedly bribing officials in Libya between 2001 and 2011 to secure government contracts during former strongman Moamer Kadhafi's reign.
It lobbied the government, including senior officials in Trudeau's office, for an out-of-court settlement that would include paying a fine and agreeing to put in place compliance measures.
A possible guilty verdict at trial, the company argued, risked crippling its business and putting thousands out of work.
But Wilson-Raybould refused to ask prosecutors to settle with the company, and the trial is set to proceed.
Trudeau has denied the allegations, saying that he had made clear to Wilson-Raybould that any decision on the case "as attorney general was hers alone to make."
Wilson-Raybould has declined to speak, citing solicitor-client privilege and cabinet confidentiality.
Butts became close friends with Trudeau in university and over the next two decades would help chart Trudeau's political future.